Registration and License
Provident Fund registration, mandatory when conditions are met, is one of the prominent source for retirement funding for employees. Shared responsibility to contribute to this starts with securing PF registration by entities. An HR compliance item, registration is a process of submitting application along with required documents. Non or delayed registration makes an entity a defaulter and not responsible towards its employees' welfare.
Incorporation of the Employees Provident Fund (EPF) was under the Employees Provident Funds Act 1952. EPF is a social security scheme which intends to secure and work for the better future of the working community in India and international workers( citizens of those countries who have signed bilateral agreements with India). EPF benefit the employees when they retire from work or leave work due to other conditions. The contributions towards EPF are monthly.
There are three different types of schemes under the EPF Act. They are:
- Employee Provident Fund Scheme : The purpose of this scheme is to provide post retirement benefit for the employees or class of employees or their legal heirs in case of death.It is pplicable for employees working under an establishment to which the act applies.
- Employees Deposit Linked Insurance (EDLI) Scheme: EDLI scheme was specifically curated to provide insurance to the employees of the establishments to which the act applies in case of death while in service.
- Employees’ Pension Scheme: The scheme covers different kinds of pension schemes. It provides the superannuation pension, a pension due to permanent disablement. Pension schemes related to widowers pension, orphan pension etc.
The condition concerning an establishment:
- Any establishment can voluntarily register for the EPF scheme.
- The statutory obligation for an establishment to register under the EPF comes when the number of employees in the organisation becomes twenty or more than twenty.
Eligibility conditions for employees:
- Any employee who receives a salary less than Rs.15,000
- If an employee has an active UAN (Universal Account Number) account, then he should be mandatorily given the provident fund requirements; irrespective of whether the establishment comes under the purview of the Act.
Profit Global helps the establishments to understand the terms of provident fundand help in the seamless registration process under the Employees Provident Fund.
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Registration of PF
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Can EPF be deducted on stipends?
EPF can't be deducted from stipends because trainees and interns do not come under the definition of a worker or employee. Other remunerations which don't come under the purview of EPF are:
- Overtime Allowance
- Dearness Allowance
- Food Allowance
What are the different documents required for EPF registration?
- Proof of address
- GST certificate or any such relevant certificate that authenticates the establishment.
- PAN card of the director/partner/proprietor.
- Digital Signature of the director/partner/proprietor.
- Cancelled Cheque.
What are the benefits of enrolling on the EPF scheme?
- It is an excellent savings option.
- It is exempted under the Income Tax Act.
- The EPF scheme gives good interest to the monthly savings.
- The EDLI scheme gives good coverage of insurance for the employees during the term of the employment. – this is available only at the time of death while in service right? Please check
- The legal heir of the employees has access to the EPF.
What is a UAN?
Universal Account Number or UAN is a unique 12-digit number allotted by the EPFO. Allocation of UAN is for all contributors and the ones given out by the employers.