Salient features of the Employees Provident Funds and Miscellaneous Provisions Act,

1952

Introduction:
     
             Labour law, the varied body of law applied to such matters as employment,
remuneration, conditions of work, trade unions, and industrial relations. In its most
comprehensive sense, the term includes social security and disability insurance as well. Unlike
the laws of contract, tort, or property, the elements of labour law are somewhat less
homogeneous than the rules governing a particular legal relationship. In addition to the
individual contractual relationships growing out of the traditional employment situation, labour
law deals with the statutory requirements and collective relationships that are increasingly
important in mass-production societies, the legal relationships between organized economic
interests and the state, and the various rights and obligations related to some types of social
services.

Employee Provident Fund:

       
              Section 5 of the Act empowers the Central Government to frame the scheme to be
called the"Employees Provident Fund Scheme". The Scheme may be for the employers in
general or for any class of employees. The Central Government shape specify the
establishments or class of establishments to which the scheme would apply. The Government
should notify the scheme and it's application. The Scheme can be applied over prospectively or
retrospectively.
             
                Employees Provident Fund and Miscellaneous Provisions Act, 1952 is a Social
Security Act passed by the Government of India. It includes Social Security Schemes namely
Provident Fund, Pension and Insurance to industrial employees.

Thus,

the provident fund advantages are provided under Employees Provident Fund Scheme, 1952,
pension benefits under Employees’ Pension Scheme 1995 and
insurance benefits under Employees’ Deposit Linked Insurance Scheme, 1976.
Further, a person making a contribution towards Employees’ Provident Fund Scheme
automatically holds the right to receive pension and insurance benefits without making any
further contribution.

Employee Provident Fund Scheme, 1952:

           
             Under this scheme, every employee is required to make a contribution towards the
provident fund at the rate of 12% of the Basic Wages, Dearness Allowance and cash value of
food concession.

Further, the employer also makes an equal amount of contribution as the employee towards the
fund. Also, a member while contributing towards such a scheme is eligible for deduction u/s 80C
of the Income Tax Act’ 1961.
Also, the sum so collected under the PF contributions of a particular member earns compound
interest. This compound interest is calculated on the monthly run balances.

Features of the Employees Provident Fund and Miscellaneous Provisions Act, 1952:

             1.  The purpose of this Act is to provide retirement and old age benefits such as
Provident Fund, Superannuation Pension, Deposit Linked Insurance etc. with the intent to
protect the interest of workers recruited in factories and other establishments.
            2.   Provident Fund is a mandatory saving by an employee during the years of his
employment.
            3.  Further, the Provident Fund Act aids to provide terminal benefits in case of
occurrence of accidents or mishaps or an unforeseen event. These include retirement, closure,
retirement due to achieving the age of superannuation, voluntary retirement or retirement as a
result of circumstances resulting in the inability of the workers or employees to work.
              4.  The benefits received under the Provident Fund act are utilized on retirement or
termination of the service

Other Important Features Of Provident Fund:

              1. EPF and also the Provident Fund of the exempted establishments is a Provident
Fund acknowledged under Income Tax Act, 1961.
            2.   An employee is entitled to receive rebate on income tax applicable on his Provident
Fund contributions. This is subject to a limit which is provided under the Income Tax Act.
             3.  In case the employer fails to make a contribution towards the Employee Provident
Fund for a specific period, the outstanding dues may be recovered by the Regional Provident
Fund Commissioners. This may be done via prosecution, attachment of bank account or
property, arrest and detention of the employer etc.
              4. If the employer seeks to recover the outstanding amount of contribution towards
Employee Provident Fund from the employees’ wages, it would be taken as a criminal breach of
trust. Such an act is punishable under section 406/409 IPC.
            5.   Payment of the Employees Provident Fund beyond the due date, that is the 15th of
the succeeding month would be liable to the payment of interest and penal damages by the
lawyer.
               6.The contribution made towards the Employee Provident Fund can be withdrawn to a
certain extent. This can be done for reasons such as illness, marriage, housing etc.
              7. All the PF claims of a particular member need to be disposed of by the EPF offices
within 30 days.
              8. The Employees Provident Fund office intimates about the annual Employees
Provident Fund balance to each employee. Annual accounts slips in Form 23 are now being
provided online on the employer’s portal from the time online compliance has come into the
scene. The members can also see their updated EPF passbooks online via the Universal
Account Number (UAC) login

Conclusion:
            
  EPF comes under Employee Provident Fund and Miscellaneous Provisions Act,1952.
EPF is an excellent saving scheme for building a sufficient retirement corpus for salaried
employees. Over the career time, one shifts a job multiple times. But, the benefit of this scheme
is added continuously under UAN. EPF can be a good investment plan as it also comes with tax
benefits. It ensures higher earnings and improves savings for employees in the
long-term.