PRESENTATION

ON
PROVIDENT FUND &
MISCELLANEOUS
PROVISIONS ACT, 1952
 INTRODUCTION
 Definition of PF:-

PF is that fund that fund which is deducted from the

salary of an employee at a definite rate.
 HISTORY OF THE ACT
The Employees’ Provident Funds Ordinance, 1951 was
promulgated by the President of India under the
constitution in November, 1951. A scheme under the Act
was framed by the Central Government in
September1951In exercise of the powers conferred by
Section 6-A of the Employees Provident Fund Act,1952
,the Central Government has maid Employees Family
Pension Scheme in 1972. It may be further observed
that in exercise of powers conferred by Section 6-C of
the Employees Provident Fund Act, 1952, the Central
Government has made Employees Deposit –linked
Insurance Scheme in 1976.
 TYPES OF PF

PF

GPF CPF EPF

 PROVIDENT FUND ACT 1952
 PF Act is an important labor legislation which came into
existence in 1952 to ensure compulsory PF, family pension
fund and deposit linked insurance in factories and other
establishment for the benefits of employees.
 The legislation of PF in industrial and under taken was
discussed in which representative of central and state Govt.,
employer and worker participated.
 OBJECTIVES & AIMS OF
THE ACT
The Employees Provident Fund Act, 1952 was brought on the
statute book for providing for the institution of provident fund for
the workmen in factories and other industrial establishments. The
basic purpose of the Act was to provide provident funds and to
make provision for future of the workmen after his retirement or
his dependents in case of his early death. In order to achieve this
ultimate object the Act is designed to cultivate among the workers
a spirit of saving something regularly and also to encourage
stabilization of a steady labour force in the industrial centres.
 SCOPE
The provision of the act extend to whole of India except
the State of Jammu and Kashmir. Section 1 (3) of the
Act provides that subject to provisions contained in
section 16 the provisions of the Act apply to-
(a) to every establishment which is a factory engaged in
any industry specified in schedule I and in which twenty
or more persons are employed.
(b) to any other establishment employing twenty or more
persons or, class of such establishments which the
central Government may by notification in the official
Gazette.
 POWER TO EXEMPT
The Factory/ Establishment in which the employees are
in the enjoyment of the benefits in the nature of the
Provident fund, Pension which in the opinion
of the Govt. are not less favourable than the benefits
provided under the Act.

 Such an exemption can be made only after consultation

with Central board of Trustee.
 INSPECTORS
 Central and State govt. for appointing the inspector.

 Duties :
Inquiring into correctness of information.
Observance of the conditions of exemptions.
Checking the books, registers and other documents.
Take extract from any book, register or document.
Power to search and seize the document under the code
of Criminal procedure. [sec.13]
 DIFFERENT DEFINITIONS
UNDER THIS ACT
 Appropriate Govt. :
In relation to an establishment belonging to, or under the control of, the central
Govt. or in relations to an establishment connected with a railway company, a mine
or an oil field or in relation to an establishment having departments or branches in
more than one industry.

 Basic Wages :
It means all emoluments which are earned by an employee while on duty or on
leave with wages in accordance with the terms of the contract of employment and
which are paid or payable in cash to him but does not include :

i. Any DA
ii. HRA
iii. OA
iv. Bonus
v. Any other
 DIFFERENT DEFINITIONS
UNDER THIS ACT
 Contribution :
A contribution payable in respect of a member under a scheme or the contribution
payable in respect of an employee to whom the insurance scheme applies.
 Employee :
Exempted employee
 Factory :
Any premises in any part of which a manufacturing process is being carried on
weather with the aid of power or with out the aid of power

 Establishment to include all departments and branches :

All the departments and branches are treated as a part of that establishment,
whether they are situated in the same place or any other place.
 FRAMING OF THE SCHEMES
AND ESTABLISHMENT OF THE
FUNDS
 Employees provident funds scheme (sec5)
 Employees deposit- linked insurance
scheme (sec6C)
 Employees pension scheme(sec6A)
 EMPLOYEES PROVIDENT
FUNDS SCHEME

Schedule II of the act specifies in matters

which are to be included under this scheme.
These include-
1. Time and manner of paying contribution
2. Payment of cost of administration by employer
3. Conditions for withdrawals from the funds
4. Rate of interest payable
5. Maintenance of records and registers etc.
 CENTRAL BOARD OF
TRUSTEES
The board consists of:-
 A chairman and a vice-chairman appointed by
the central govt.
 Not more than 5 central govt. officials
 Not more than 15 representatives of the state
govt.
 10 representatives of employers in consultation
with organisations of employer
 10 employees representatives in consultation
with organisation of employees, all appointed by
central govt.
 EXECUTIVE COMMITTEE
 A chairman from amongst the members of
the central board
 2 officials members of the board
 3 representatives of the state govt.
 3 representatives of the employers
 3 representatives of employees (members
of central board)
 Central provident fund commissioners ex-
officio.
 STATE BOARD
 The central govt. is also empowered to
constitute state board of trustees as laid
down in EPFS.
 Powers & functions of state board are
assigned by central govt.
 OFFICERS
 Officers include central provident
commissioner who will be CEO of the
central board of trusties, one financial
adviser and chief a/c officer appointed by
central govt.
 CONTRIBUTION
 It is payable by employer to the provident
fund will be 10 % of the basic wages.
 Govt. may raise contribution from 10% to
12%.
 TERMS UNDER EPFS, 1952
Coverage:-
i. Applicable to factories in about 180
industries of establishments employing
20 or more workers.
ii. From 1 June 2001 wage ceiling has been
raised to Rs. 6,500.
 CONTRIBUTON
 Central govt. is empowered to raise the
contribution from 10% to 12%
 RATE OF INTEREST
 Rate of interest on PF has been reduced
to 9.50% from 12% and is likely to be
reduced further.
 INVESTMENT
 PF contribution are invested as per the
pattern prescribed by the central govt.
 WITHDRAWAL
COMPLETE WITHDRAWL
• Migrate from India to abroad for permanent settlement
•Retrenched
•Completes 15 years of members
•Suffering from any severe disease
PARTIAL WITHDRAWAL
•Construction of house
•Illness
•Marriage
•Higher education of children
•Payment of life insurance premium
•Purchase of share
EMPLOYEES’ DEPOSITE-LINKED
INSURANCE SCHME,1976

EMPLOYEES’ PENSION SCHEME

,1995
 WHAT IS IT?
 The central government is empowered to
frame the employees’ deposit-linked insurance
scheme for the purpose of providing insurance
benefits to the covered under the act .
 CONTRIBUTION
 .05% of the employees wages.
 Government contributes .25% of the employees
wages bill.
 BENEFITS
 The person is entitled to receive his provident fund
accumulations is to be paid an additional; amount
equal to the average balance in the provident fund
account of the deceased during the preceding 12
months, wherever the average provident fund balance
is less than Rs 35,000

 More than the 35,000 he will get 25% more.

 INVESTMENT
 The total of the contribution received to the insurance
fund was Rs 1301 Caror in 2000
 1441 caror in 2001

 The progressive total of investment of fund was Rs

2466 caror in 2000

 Rs 2783 caror in 2001

 EMPLOYEES’ PENSION
SCHEME ,1995
 Employees’ pension scheme aimed at “providing for
economic sustence during old age and survivorship
coverage to the member and his family.
 COVERAGE
 Employees’ pension scheme ,1995 is compulsory for
all person who were member of the family pension
schme,1971

 For also those Employees’ provident fund fro 16

November 1995 that is the date of introduction of the
scheme.
 FINANCE
 Neither employee nor employer is required to make
any additional contribution.
 BENEFITS
 Monthly member’s pension on
superannuation/retirement and short-services pension.

Member’s pension=pensionable salary*(pensionable salary+2)

70
 MONTHLY REDUCED PENSION
 Date after 50 years of age but earlier than 58 years, in
this case amount of pension is reduced @ rate of 3%
every year the age falls short of 58 years
 Permanent and total disablement plan
 Monthly widow pension
 Monthly children pension
 Monthly orphan pension
 Monthly pension to permanently and totally
son or daughter
 MISCELLANEOUS PROVISIONS
 Laying of the scheme Parliament :-
All the schemes framed under the act are to be laid before the
parliament which can modify and annual them. [Sec. 6D]

 Modification of the scheme [Sec. 7]

 Determination of moneys due from employers:

[Sec7A,7B,7C]-
All the Commissioners are empowered to determine the
amount of due from any employer under the act.
If the determination of the amount is not perfect, the inspector
can re-open the case for further inquiry.

 Employees’ PF appellate tribunal [Sec.7N]

 MISCELLANEOUS PROVISIONS

 Interest payable by employer : [Sec.7Q]

The employer is liable to pay simple interest @ 12% per
annum.

 Employer not to reduce wages and others

[Sec.12]

 Special provisions relating to existing PF

[Sec.15]

 Transfer of accounts [Sec.17A]

 Provident Fund Code
 Returns- The monthly return of joining & leaving of
employee’s is send in Form-5 & Form-10. The status of
maintenance of submission of Form-5 & 10 by the
Company/Establishment or by the contractor is as per the
State Law Directives.
 P.F. Number Allocation- The P.F. No. is being allocated
to their employees by the company for depositing the P.F.
contribution on monthly basis.
 VARIOUS FORMS
 Form 2- For Nomination.

 Form 5 &10- For new joining and leaving of the employees.

 Form 13- For transferring the Provident Fund account of a member from
one establishment to another establishment covered under the act /
scheme.

 Form 19- To be submitted by a member to withdraw his Provident Fund

dues on leaving service/retirement/termination.

 Form 20- In the event of death of member, this form is to be used by a

nominee / family member to claim the member's Provident Fund
accumulation.

 Form 10 C- For claiming : Refund of Employer share / Withdrawal

benefit /Scheme certificate for retention of membership.

 Form 31- For the use of Provident Fund members to avail advances /
withdrawals as provided in the scheme.
 PENALTIES & COGNIZANCE OF
OFFENCES {sec 14}
 If any person, for the purpose of avoiding any payment to be made
under the Act or the Schemes, knowingly makes any false
statement or false representation, he would be punished with
imprisonment up to one year, or with fine up to Rs. 5000.00 or with
both.

 Making default in paying prescribed employees’ contribution

deducted from wages is punishable with imprisonment for 1-3 years
& fine of Rs.10,000.

 If any employer makes default in payment of the administrative

charges payable under the Deposit Linked Insurance Scheme under
section 6-C or inspection charges, he would be punished with
imprisonment up to 6 month to 3 years plus fine up to Rs. 5000.
 PENALTIES & COGNIZANCE OF
OFFENCES {sec 14}
 Non payment of inspection charges under the Deposit Linked Insurance
Scheme is punishable with imprisonment from 6 months to one years plus
fine up to Rs. 5000.

 If any person makes default in complying with any other provision of the
Act, he would be punished with imprisonment upto 1 year but which shall
not be less than 1 month and with fine upto Rs. 4000.00 or with both.

 If any person convicted of an offence under the Act or the Schemes

commits it again, he would be punished with imprisonment upto five years
but which shall not be less than two years, plus fine upto Rs. 25000.

 The offence relating to default in payment of any contribution especially the

employee's share deduct from the wages of the employees by the employer
is cognizable. That means a person committing such offence can be
arrested by the police without warrant. {Section 14(AB)}
 PENALTIES & COGNIZANCE OF
OFFENCES {sec 14}
 No court is to take cognizance of any offence under the
act or the scheme except on a written report by an
inspector which is sanctioned by the chief PF
Commissioner or an officer authorized by the central
government.
 When an employer is convicted of an offence relating to
default in the payment of contribution or transfer of
accumulation, the court in addition of awarding any
punishment, by order require him to pay the amount
within a specified period. If the employer does not
comply with the order he is liable to pay fine which may
extend to Rs.100 for everyday of default.
 RECOVERY OF DAMAGES
 In 1991, the Central Government, by inserting Para 32-A
in the Employees' Provident Funds Scheme, has laid
down different rates of damages depending upon the
period of default.
Damages:
 Less than 2 months ….@ 17% per annum
 Two months and above but less than up to four months

….@22% per annum

 Four months and above but less than up to six months

….@ 27% per annum.

 RECOVERY OF DAMAGES
 In case an employer makes default in the
payment of contributions to the funds, or in the
transfer of accumulations or in the payment of
any charges, the central PF Commissioner or an
officer authorized by the central govt. may
recover from him.
 Damages not exceeding the amount of arrears,
as may be specified in the scheme.
 The central board of trustees may reduce or
waive the damage.
CONCLUSION
THANKS