Accounts & Compliance

PF Registration & Filing

PF registration, also known as Provident Fund registration, is a mandatory process in India that employers need to undertake to enroll their employees under the Employees’ Provident Fund (EPF) Scheme. The EPF is a social security scheme created by the Government of India to provide financial security to employees during their retirement. Under this scheme, both the employer and the employee contribute a percentage of the employee’s basic salary, dearness allowance, and retaining allowance to the EPF account.

The process of PF registration involves the employer obtaining a unique Establishment Code Number from the Employees’ Provident Fund Organization (EPFO). This code serves as an identification for the employer, and it is used to make monthly contributions for each eligible employee. Once registered, employers are required to deduct the employee’s share of the contribution from their salary and deposit both the employer and employee contributions with the EPFO on a monthly basis.

PF registration is crucial for both employers and employees as it ensures compliance with labour laws, facilitates employees’ long-term savings, and provides a financial safety net for retirement. Non-compliance with PF registration can lead to legal consequences and penalties.

Who is eligible to get EPF registration?

For Employer

PF Registration is mandatory for all the establishments-

• That has engaged 20 or more than 20 people.
• For any other establishment that has less than 20 people then the central government has to specify the same in the notification on the behalf.

For Employee

Employees drawing less than Rs.15000 basic salary per month need to mandatorily become members of the EPF. According to the guidelines, employees whose basic pay is more than Rs. 15000 a month at the time of joining are not required to make any PF contributions.

But an employee who is drawing pay of more than Rs.15,000 can still be a member and make contributions with the employer and the Assistant PF commissioner.

The amount for the contribution of PF

The employer has to obtain the PF registration within 1 month of attaining the strength, in case of failure to abide by applicable penalties. A registered establishment continues under the purview of the Act even in case the No of employees falls below the required limit.

The employer has to contribute 12% of the (Basic Salary + Dearness Allowance + Retaining Allowance). An equal amount of contribution is to be made by the employee. If the establishment has engaged less than 20 employees the EPFO rules state that the contribution rate for both the employees and the employer is limited to 10 %. In most cases the employees who are employed in the private sector it is on the basic salary on which the whole contribution is calculated.

The breakup of the PF contribution

• The 12 % contribution is divided into the following subdivision:
• 3.67% of the contribution towards the Employees Provident Fund
• 1.1% of the contribution towards the EPF administration Charges
• 0.5% of the contribution towards the employee’s deposit linked insurance
• 0.01% contribution towards the EDLI administration charges
• 8.33% towards the Employees Pension Scheme.

What is the Employees Pension Scheme?

8.33% of the employer’s contribution is routed towards the Employees Pension Scheme that is calculated at Rs.15,000. The amount routed to the Employee Pension Scheme would be Rs.1250 in case the basic pay of the person is Rs.15,000. If the Basic Pay is less than Rs.15,000 then 8.33% of the amount will be routed and the balance will be retained in the EPF scheme. On superannuation, the employee would receive the full share with the employer’s share reserved for credit in the EPF account.

Documents Required for Registration

The employer has to attach the following documents with the registration form:

• PAN of the Partner, Proprietor, or the Director and the entity.
• Address proof (can be any utility bill but should not be older than 2 months)
• Aadhar card of Proprietor, Partner, or Director.
• Canceled Cheque Or Bank Statement
• Digital Signature of the Proprietor/ Partner or Director.
• Hired/ Rented or Leased Agreement If there is any.

EPF charges

The contribution is rounded to the nearest rupee for each of the employees for the employee share, the contribution towards pension, and the EDLI contribution.

The employer share is the difference between the employee Share and the pension contribution.

The monthly payment amount towards the EPF administrative charges is rounded to the nearest rupee and a minimum of Rs.500 is payable.

In case the establishment has no member in the month the minimum administrative charges applicable will be Rs.75.

The monthly payment amount under the EDLI administrative charges is rounded to the nearest rupee and a minimum of Rs.200 is payable.

In case the establishment has no member in the month, the payable minimum administrative charge is Rs.25

Suppose the establishment is exempted from the PF scheme inspection charges of 0.18% (Minimum Rs 5) is payable in place of the admin charges

In case the establishment is exempted under the EDLI scheme. The inspection charges of minimum Rs.1 @0.005% are payable in place of the administrative charges.

Due date

Before paying the Salary to the employees the employer must deduct the employee’s contribution from his wages. Later, the employee portion and the employer’s share will be payable to the EPFO within 15 days of the close of every month.

The EPF stands tall in terms of returns from a debt instrument. The money is sovereign backed and the interest earned is tax-free. The PF enjoys EEE (exempt, exempt, exempt) status as contributions are deductible from the income. Hardly any debt instruments provide such high returns with safety and assurance. Hence, it is better to transfer the PF account at the time of switching jobs and also avoid the temptation to withdraw the money.

PF Return Filing

PF return filing refers to the process where employers submit information related to the Provident Fund (PF) contributions and deductions made for their employees. In India, the Employees’ Provident Fund Organization (EPFO) mandates employers to file monthly and annual returns to report the PF contributions made on behalf of their employees.

On a monthly basis, employers are required to file the Electronic Challan cum Return (ECR) with the EPFO. The ECR includes details of the PF contributions, both from the employer and the employee, as well as other relevant information such as employee details, wages, and any other allowances.

Additionally, employers need to file an annual PF return, known as Form 3A and Form 6A, providing a consolidated summary of the monthly PF contributions made for each employee throughout the year.

This annual return helps in reconciling the monthly contributions and ensures accurate reporting to the EPFO.

PF return filing is a crucial compliance requirement to meet statutory obligations, and it allows the EPFO to maintain accurate records of PF contributions made by both employers and employees. Timely and accurate filing ensures transparency, legal compliance, and the smooth operation of the Provident Fund scheme for employees’ retirement benefits. Non-compliance with PF return filing may result in penalties and legal repercussions for employers.

Form 2

Form 2 is filed as a declaration and nomination under the Flagship scheme of the Employment Provident Fund and the Employment Family Pension Scheme. Form 2 must be filed by the employees who are joining the establishment. This form is to be submitted with Form 5. Form 2 is divided into 2 different parts.

Part A

Part A of Form 2 deals with nominating the recipients of the EPF balance of the particular account holder, in the event of his or her death. This part of the form must include the following details:

• Name
• Address
• Relationship with the subscriber
• Age
• The sum of the money that is to be paid to the nominee
• Guardian Details ( In case the nominee is a minor)

This Part has to be signed or needs to have a thumb impression to be made at the end of the section.

Part B

The details of the nominee as already mentioned in Part A should also be included in Part B. Additionally, the details of the members who are eligible to receive the children/ widow pension must be furnished.

This Part again must be signed duly or a thumb impression has to be made at the end of the section.

Form 5

Form 5 is a monthly report that contains the details of the employees who are newly enrolled in the provident fund scheme. Form 5 must include the following details:

• Organization’s Name
• Address of the Organization
• Code of the organization
• Account number of the Employee
• Name of the employee
• Middle Name (Husband/Father)
• Date of birth of the employee
• Date of joining
• Track record of the work.

The form is to be filed and stamped by the employer with the date of filing mentioned on it.

Form 10

It is a monthly report that includes the details of the employees who have ceased to be a part of the scheme on the given month. Form 10 includes the following details.

• Account Number
• Name of the employee
• Name of the father or the husband
• Date of leaving the service
• Reason for leaving service.

Form 10 must be filed and stamped by the employer with the filing date of the form.

Form 12A

This Form 12 A is a report that contains the payment details that are contributed to the account of the respective employee in a particular month.

Annual PF Return Filing

The annual returns are to be filed by the 30th of April in a given year. The forms that are utilized for filing the annual PF returns are

• Form 3A
• Form 6A

Form 3A

The Form 3A depicts the month-wise contribution to the subscriber or members and the employers towards the Employee Provident Fund and the Employee Pension Fund in a year. The data is calculated by every member who is a part of the scheme. Additionally, the scheme will include the following details

• Account Number
• Name of the subscriber
• Name of the father or the husband
• Name and address of the establishment
• The statutory rate of contribution
• Voluntary contribution in case if there is any.
• Form 3A must contain the signature and the seal of the employer.

Form 6A

Form 6A is a consolidated annual contribution statement that includes details about the annual contribution of each member of the establishment. The Form has to include the details as they are enumerated below:

• Account number
• Name of the members of the subscriber
• Wages, retaining allowance if there is any, and the D.A that includes the cash value of the food concession that is paid during the currency period.
• The amount of contribution that is deducted from the wages.
• Employer’s contribution (Both EPF and Pension)
• Refund of the advances
• Rate of the higher voluntary contribution (If there is any)
• Remarks

Besides this, the following details should also be included in the amount remitted column:

• The month of the contribution
• The remitted contribution that includes the refund of the advances
• EDLI Contribution
• Pension Fund Contribution
• Administrative charges
• Aggregate contributors.

Documents Required For PF Return Filing

• Bank Statement (Latest bank account statement or a cancelled check of bank account)
• Payment Challan (Copy of Provident Fund Payment Challan)
• PF Contribution (List of PF Contribution)
• PAN Card (ID and address proof PAN of the employee and employer)
• Aadhar Card (ID and address proof Aadhar of the employee and employer)
• Balance Sheet (Balance sheet details of companies)
• Monthly Pay Sheet (Monthly pay sheet of the employees)
• Incorporation Certificate (Certificate of Company Registration in case of a company)