Employee's providend fund(e.p.f)
Rupesh
(Querist) 14 December 2012
This query is : Resolved
Dear Experts,
one company incorporated in 2001 and its no. of employees are less than 20 so they created a trust for Provident Fund after taking exemption from Income Tax for Trust and depositing the employees and employers share in this trust. In 2009 employees strength goes beyond 20 and company apply for E.P.F. registration in R.P.F.C. and depositing 8.33% in pension fund and rest 15.67% deposit in its own trust and apply for exemption in R.P.F.C. for Trust. Department asked to submit some papers related to this which company deposited but not given exemption certificate. Now after 3 years Department asking to deposit the rest of the 15.67% in account no.1.
please guide us, what to do in this matter.
Raj Kumar Makkad
(Expert) 14 December 2012
You have to submit the exemption certificate granted by RPFC which shall be sufficient for you to establish your liability only up to the extent you are already following.
Guest
(Expert) 14 December 2012
Exemption from Income Tax department for what purpose of the Trust? That does not seem to have any relevance with specific refence to the EPF Act.
However, Sec. 6A of the EPF Act does not provide for deposit of mire than 8.33% in the Pension Fund with the RPFC, as can be seen in the extract from the section below:
6A. Employees’ Pension Scheme.
(2) Notwithstanding anything contained in section 6, there shall be established , as soon as may be after framing of the Pension
Scheme, a Pension Fund into which there shall be paid, from time to time, in respect of every employee who is a member of the
Pension Scheme, -
(a) such sums from the employer‟s contribution under section 6, NOT EXCEEDING exceeding eight and one-third per cent of the basic wages, dearness allowance and retaining allowance, if any, of the concerned employees, as may be specified in the Pension Scheme.
You may therefore, instead of blindly following instructions of the RPFC, seek appropriate clarification from the RPFC for asking to deposit additional 15.67% as against the provisions of sec. 6A(2)(a) of the Act.
Sudhir Kumar, Advocate
(Expert) 14 December 2012
It is understood that you have no exemption notification issued by CENTRAL GOVERNMENT under section 17 OF EPF Act and not depositing entire EPF with the EPFO. Income Tax Deptt is nto empowered to issue any such exemption from deposit of PF it can only give permission to treat the deposit as saving.
It is evasion and you are liable for action under the EPF&MP Act 1952.
Raj Kumar Makkad
(Expert) 14 December 2012
You are not liable to deposit the contribution prior to the period of your coverage and thereafter you have to follow the Act and Rules framed there-under but your contribution cannot be over all more than 12% of basic pay, dearness allowance, retaining allowance and food concession, if any limited to Rs. 6500/- per month of an employee so but in the account no. 1, the entire share of employee and 3.67% of employer is credited whereas in Account no. 2, 8.67% of employer share is credited whereas account no. 5, 21 and 22 are for administrative charges.
