EPF is an ideal retirement fund in which both the employer and the employee contribute an amount equal to 12% each of the employee’s salary (basic and dearness allowance) to the EPF, at fixed equal intervals. However, only the employers that are registered and their employees can contribute to this fund. The interest received on the total accumulated amount (deposit and the interest received) is tax-free. Employer registration can be done voluntarily or through the statute mandate.
To ensure the safety of the fund and timely payments by employers and employees, provisions with respect to the fund are governed by The Employers’ Provident Funds and Miscellaneous Provisions Act, 1952 (PF Act). As per the act, all the companies that have employed more than 20 individuals including the ones on contractual basis must register under the PF Act. It must be noted that after the activation of PF Act, even if the number of employees in the organization gets lower than 20, the employer organization will still be governed by the PF Act.
Provident Fund Payment Due Date
Provident Fund (PF) payments are due on the 15th of each month. The employer must deposit a total of 12% or 10% of the employee wages towards PF on or before this date every month. For most entities, the PF rate of 12% would be applicable. The 10% PF rate is applicable for:
- Any establishment in which less than 20 employees are employed.
- Any sick industrial company and which has been declared as such by the Board for Industrial and Financial Reconstruction
- Any establishment which has at the end of any financial year, accumulated losses equal to or exceeding its entire net worth and
- Any establishment in following industries:-
- Jute
- Beedi
- Brick
- Coir
- Guar gum Factories.
Provident Fund Return Due Date
Provident fund return must be filed by all entities having PF registration every month. PF return is due on the 25th of each month. Further, a final PF return is due on the 25th of April for the year ended on 31st March.
PF Due Date Falling on Public Holiday/Sunday
when grace period was allowed, employers were levied with penal damages for payments deposited by them after the due date, even if the particular due date was a public/bank holiday. After EPFO’s recent update on due date, remittances made under such circumstances will be treated as a normal payment, and will not incur penal damages.
FAQs
Penalty for Delayed Payment?
Delayed remittance of PF deposit will incur penal damages. The penal charges, as specified by the EPFO, are as follows:
| S.No | Time-Period of Delay | Rate of Penalty |
| 1 | Delay for up to 2 months | 5% per annum |
| 2 | Delay ranging from 2 months to 4 months | 10% per annum |
| 3 | Delay ranging from 4 months to 6 months | 15% per annum |
| 4 | Delay exceeding 6 months | 25% per annum (It may correspondingly go up to 100%) |
Withdrawal of Grace Period for PF Deposit?
A grace period of five days was allowed to the employers to remit the PF deposit, thereby affording the employer a 20 period window in a given month. This can be attributed to the manual calculation of remuneration and dues, which was time-consuming. Such a delay is now being avoided, thanks to the electronic computation of wages and EPF liabilities. Moreover, the contributions are now deposited through internet banking. Taking this into perspective, the EPFO decided to withdraw the grace period that was previously afforded to the employers. Hence, the employers must deposit their contributions by the 15th of every month.
