At the end of the workshop, participants will be able to:

• Understand concept of provident fund.

• Know Deductions as per new Ceiling limit.

• Who will be covered under PF scheme?

• Know the criteria for PF deduction

• Understand Returns and tax benefits.

• Understand how greytHR can help in including employees in PF scheme and file

EPF online without much hassle.

Objectives

What is Provident fund?

Provident fund can be termed as a social security measure implemented by

Government for the benefit of its citizens. An employee contributes some % of his

salary towards it and the employer is supposed to make the same contribution.

The employee can withdraw the PF amount on retirement/resignation from the

service/Unemployed.

EPFO revises ceiling limit

• Ceiling limit increased to Rs. 15000 from Rs. 6500

• W.e.f 1st september 2014, All the employees with Basic equal to or less than Rs.

15000/- will be mandatorily covered under the act.

• Employers to ensure that the basic salary is 50% of CTC for all the employees.

• Upto 50 lacs new employees expected to join PF scheme with the amendment.

Deductions as per new ceiling limit:

• PF deduction is mandatory for all the employees whose basic + da is less than or

equal to 15000.

• Employees with basic + da more than 15000 have an option to opt out of PF

scheme.

• Deduction will be 12% of basic + da for an employee.

• If the basic + da is more than 15000, employer have an option to pay 12% of actual

amount or base ceiling limit i.e Rs. 15000 (12% of 15000 = Rs. 1800).

PF deduction for Employers:

• All the organizations having an employee strength of 20 or more than 20 are eligible for PF deductions.

• Employer has to contribute 13.61% towards PF deduction. It is divided as:

- Pension Fund : 8.33%

- Provident Fund : 3.67%

- Employee Deposit Linked Insurance : 0.5%

- Administrative Charges for PF Scheme: 1.10%

- Administrative Charges for EDLI Scheme: 0.01%

Example:

An employee with Basic salary = 15000

Break up of contribution:

Employee contribution (12% of Basic salary) = 12% of 15000

= Rs. 1800

Contd..

Employer Contribution:

Employer has to contribute 13.61% towards PF deduction. It is divided as:

• Pension Fund : 8.33% = Rs. 1249

• Provident Fund : 3.67% = Rs. 550.5

• Employee Deposit Linked Insurance : 0.5% = Rs. 75

• Administrative Charges for PF Scheme: 1.10% = Rs. 165

• Administrative Charges for EDLI Scheme: 0.01% = Rs. 1.5

Employees with salary(Basic+DA) > 15000

Employees who have basic salary more than 15000 and want to be a part of PF scheme:

• The contribution will be only towards EPF.

• This is also applicable for employees, whose first salary (B+DA) is greater than Rs. 15000 and have joined on or after 1st Sept,14 will not be member of EPS (Employee Pension Scheme).

Voluntary Provident Fund (VPF)

• VPF is an option for employees, where they can invest more than the 12% limit in provident fund.

• The maximum limit is 100% of basic salary.

• The contribution over and above 12% will be deducted only from employee’s salary.

Tax benefits and ROI:

Tax benefit:

Sec 80 (C): Tax exemption on the investment up to 1.5 lakhs

Rate of Interest:

The current rate of interest on PF is 8.75%

PF E-filing process

PF e-filing process:

New joined employee added to PF scheme

Update the PF number

Create ECR file

Upload ECR file to EPFO. Generate Challan

Make remittance to EPFO

Add Employee PF details: Step 1

Add Employee PF details: Step 2

How to fill ECR?

• Step 1: Use any Spreadsheet (Open Office, Excel, Lotus etc,) for creating the member details as per the prescribed format and save the file in CSV (Comma delimited) format.

• Step 2: Open the CSV file in any text editor (notepad, edit plus, etc.,) and replace all “,” with “#~#”. Save the CSV file.

• Step 3: Change the file extension from CSV to TXT. Your file will be ready for upload.

Generate ECR: Step 1

Log in to your greytHRaccount and click on reports

Generate ECR: Step 2

Generate ECR: Step 3

Sample ECR:

How to file PF?

• Login to http://esewa.epfoservices.in/

• Upload the ECR file

• On successful upload of the ECR file, a Summary page of uploaded ECR file will appear.

• Fill in the details regarding EDLI and EPF/EDLI administrative/inspection charges.

• On click of submit button, a digitally signed PDF File will appear.

• Once you approve the PDF file, a challan will be generated with a TRRN (Temporary Return Reference Number) along with an acknowledgement slip for the uploaded ECR file. Print the challan and make the remittance.

Payment Options:

There are two options:

A: If you are a CINB (Corporate Internet Banking) customer of any of the 56 banks approved by EPFO, you can make online remittance using the TRRN.

B: The challan along with DD/cheque can be deposited to any of the SBI branches.

Note: The challan generated will be valid only for 15 days.

Update Remittance record in greytHR:

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For more details Write to us at webinar@greytip.comVisit our Help Docs

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