Providend Fund Act_Practical Problems_21

What are the rights of person if a contract has no mention of salary breakups and the employers PF is included as part of the Gross Salary?

There is nothing illegal if there is no mention of salary breakup and employers PF included as part of the Gross Salary. The PF can be deducted as a Contribution of employee from the Gross Salary. In addition the employer has to contribute his share of PF subject to maximum privilege prescribed in Section 6 of Act.

Providend Fund Act_Practical Problems_20

Can any employer send his employee on forced leave for not to initiate disciplinary proceeding but to legally punish him?

The employer can not send an employee on forced leave without initiating any disciplinary proceedings against an employee. Only after necessary show cause or charge sheet has been issued and after holding disciplinary inquiry or proceedings, the employer can legally punish you. If the employee fails to receive the payment from the employer after having entered into full and final settlement of the account, the employee can file a civil suit for recovery of office dues. In case gratuity has not been paid then the employee can proceed under the provisions of Payment of Gratuity Act and then in case Provident Fund has not been released after the employee leaving, then he can proceed under the provisions of the Provident Fund Act.

Provident Fund Act_Practicle Problems_19

What points and matters should be kept in mind by member while sending application to Employees' Provident Fund organization ?

Instructions for a member while sending application to Employees' Provident Fund Organization:

1. Use the appropriate form for claiming Provident Fund Pension, withdrawal benefit/scheme certificate, Employees' Deposit Linked Insurance benefit, etc. as given below :-
Form-19 : To claim final settlement of Provident Fund by a member.

Form-20 : To claim Provident Fund by nominee/legal heir on death of the member.

Form-10-D : To claim pension. (In duplicate : If within state, In triplicate : If outside state.)

Form-10-C : To claim withdrawal benefit/scheme certificate under Employees' Pension Scheme '95.

Form-5IF : To claim assurance benefit under Employees' Deposit Linked Insurance '76 by nominee/legal heir of a member.

Form-31 : To claim temporary withdrawal/advance under Employees' Provident Fund scheme'52.

Form-13 : To effect transfer of Provident Fund/Pension from one A/C to another.

2. Ensure that all columns of the application are filled completely.

3. Information in the application form relating to name, a/c no. should agree with the detailsavailable with Employees' Provident Fund Organization; which were furnished by the employer at the time of enrolling to Provident Fund.

4. Application should be signed by the member/claimant.

5. It should be attested by the former employer. In case attestation by the former employer is not possible, it should be got attested by any other authorized official specified with application form.

6. Application for final settlement can be sent by a member on completion of 2 months from the date of leaving service, if the reason for leaving service is other than superannuation, medical ground, retrenchment and V.R.S./ Female members getting married etc.

7. Desired mode of payment can be given legibly, if the amount involved is more than Rs. 2000/-. The amount will sent by deposit in payees' bank a/c. To facilitate this, Bank a/c no., name and address of the bank should be furnished. An advance stamped receipt should also accompany this application. Application may be supported by the return Form-10, showing the details of leaving service and details of contribution for the year in Form-3A, if not sent earlier by the employer.

Provident Fund Act_Practicle Problems_18

What is the voluntary rate of Provident Fund contribution by the member?

As per the Act, the member has to contribute at the rate of 10% or 12% of his basic pay, D.A. & retaining allowance if any. In case the member wants to contribute more than this, voluntarily he can do so at any rate he desires. i.e. upto 100% of basic and D.A. But the employer is not bound to contribute at the enhanced rate.

Provident Fun Act_Practicle Problems_17

What are the modalities to be followed for payment through cheque?

The member has to open an account in the nationalised bank, scheduled bank, urban bank or post office savings bank. He has to furnish the details of bank a/c no. with the full address of the bank in application form. An advance stamped receipt has also to be annexed in the form.For receipt of pension member/claimant has to open an account only in State Bank of India or Punjab National Bank.

Provident Fund Act_Practicle Problems_16

What is the procedure to be followed by the member if the employer is not attesting his claim forms?

It is the duty of the employer under the Act & Scheme to help Employees' Provident Fund organisation to settle the Provident Fund dues of his employees. He has to complete the prescribed application within 5 days of receipt of forms & hand over it to the member when he leaves the service. When a member finds difficult to get the form attested by the employer, he can get the attestation of any of the following officer & send to the Provident Fund office
1. Manager of a bank.
2. By any gazetted officer.
3. Member of the Central Board of Trustees./ committee/ Regional Committee (Employees'Provident Fund Organization). Magistrate/ Post/ Sub Post Master/ President of Village Panchayat/ Notary Public.

Provident Fund Act_Practicle Problems_15

What are the periodical returns to be sent by an employer to the Provident Fund Office?

The employer of an un-exempted establishment has to forward the following returns. These returns will include details required under the three schemes namely, Employees Provident Fund Scheme, 1952, Employee Deposit Linked Insurance Scheme,1976 and Employee Pension Scheme, 1995.

a) Form-9(Revised):The details of employees enrolled as members of Employees' Provident FundS'52, Employees' Deposit Linked Insurance'76 & Employees' Pension Scheme'95 on coverage of the establishment- This is to be submitted immediately after coverage, within 15 days of coverage.

b) Form-12A:The details of the contributions recovered form the members & paid along with details of employers' contribution & administrative charges- This is to be submitted monthly by 25th of following month.

c) Form-5:The details of the employees enrolled newly to the Provident Fund- To be submitted along with Form-12A every month within 15 days of the following month.

d) Form-10:The details of the employees leaving service during the month- To be submitted along with form-12A.

e) Challans:The triplicate copy of challans in token of having remitted the Provident Fund dues in the bank- to be submitted along with form-12A every month.

f) Form-2(Revised):Nomination form- To be submitted along with form-5/9.

g) Form-3A:The details of wages & contributions in respect of each member, to be prepared financial year wise- To be submitted to the Provident Fund office by 30th of April every year.

h) Form-6A:Yearly consolidated statement of contributions- To be forwarded yearly along with form-3A. It should be ensured that all the form-3A are entered in form-6A, irrespective of whether the form-3A was forwarded for the broken period and the total dues as per the form-12A for the whole year agrees with the total of form-6A within 30th April.

i) Form-5A:Return of ownership of the establishment- To be forwarded immediately after coverage & whenever there is a change in the ownership, it has to be intimated with in 15 days of change.

j) Specimen signature:Specimen signature of the officer/officers who are authorized to sign the returns/documents relating to Provident Fund forwarded immediately after coverage & whenever there is a change inauthorized officer.



19) What is the procedure to be followed by the member if the employer is not attesting his claim forms?
It is the duty of the employer under the Act & Scheme to help Employees' Provident Fund organisation to settle the Provident Fund dues of his employees. He has to complete the prescribed application within 5 days of receipt [para72(5)] forms & hand over it to the member when he leaves the service. When a member finds difficult to get the form attested by the employer, he can get the attestation of any of the following officer & send to the Provident Fund office
1. Manager of a bank.
2. By any gazetted officer.
3. Member of the Central Board of Trustees./ committee/ Regional Committee (Employees'Provident Fund Organization).
4. Magistrate/ Post/ Sub Post Master/ President of Village Panchayat/ Notary Public.

Provident Fund Act_Practicle Problems_14

What is nomination?

Every member has to give the details of himself & details of the nominee for Employees' Provident Fund & Employees' Deposit Linked Insurance Schemes and details of family for Employees Pension Scheme, 1995 in form no. 2. A member if, is having a family can nominate any one or more persons to receive the Provident Fund on his death. In case of him having no family he can nominate any other person. Family for the purpose of Employee Provident Fund Scheme'52 means wife/husband, children, whether married or unmarried, including adopted children, if adoption is recognized and dependant parents of member. Employees Deposit Linked Insurance Scheme benefit will be paid to the nominee under Employees Provident Fund Scheme, 1952. For the purpose of Employees Pension Scheme,1995 the member has to furnish the details, such as name, relationship & age of all the family members in the form no. 2. Family for the purpose of Employees Pension Scheme, 1995 means wife/husband & children. Whenever member wants to make a change in the nomination already made for Provident Fund, or to update the details of family for Employees Pension Scheme,1995, he has to send a revised form no. 2. The form no.2 is routed through the employer.

Provident Fund Act_Practicle Problems_13

Can member change his/her nomination? What if member has not nominated anyone.




He/She can change his/her nomination whenever he/she decides within the framework of rules for such nomination. In other words if he/she has a family, nomination should be in favour of a member(s) of the family. If he/she has no family he/she can nominate anyone he/she wishes.
The pension / ROC will be paid to the dependent parents.

Provident Fund Act_Practicle Problems_11

What is meant by Family under the PF Act ?

Family means employees' spouse and children below 25 years of age.

Provident Fund Act_Practicle Problems_10

If employee is not a Family Pension Scheme member and he/she is 56 years of age, Can he/she join Family Pension?

Yes, by diverting from his/her Provident Fund balance, Family Pension Scheme contribution from date of his/her joining or 01-03-71, whichever is later.

Provident Fund Act_Practicle Problems_9

If employee is a Family Pension Scheme Member and he/she has retired after 58 years of age on 15-01-94. Can he/she join the new scheme?

Yes, anyone who has retired by reaching age 58 between 01-04-93 and 15-11-95 may join the scheme by returning the withdrawal benefit along with interest. He will be paid pension with immediate effect, from date of exit provided he has rendered 10 years of contributory service.

Provident Fund Act_Practicle Problems_8

If employee was a Family Pension Scheme member. He/She has left on 13-12-93 and he/she is 54 years old. He/She has taken his withdrawal benefit. Can he/she join the new scheme?

Yes, by refunding withdrawal benefit together with interest. Thereafter, he/she will be entitled to receive pension from age 58, if he/she completes atleast 10 years of contributory service by then.

Provident Fund Act_Practicle Problems_7

What is a covered establishment?

Covered establishment is an establishment belonging to the class of industries / other establishments, which has been listed in the schedule appended to the Employees' Provident Fund and Miscellaneous Provisions Act 1952 and where 20 or more persons are employed.

Provident Fund Act_Practicle Problems_6

Who will be covered by the Pension Scheme?

Every member of the ceased Family Pension Scheme 1971 and anyone who joins any covered establishment on or after 16-11-95 is compulsorily to join this scheme, provided his/her salary/wage is less than Rs. 6500/- per month at the date of appointment.

Provident Fund Act_Practicle Problems_5

Mrs. Tsunami who was an employee of M/s. Backbone Ltd. died in a sudden accident. She had taken a loan from a bank for purchasing a house and the loan was still out standing. After her death her legal representative applied for payment of her P.F dues. The bank lodged a claim with the authorities for payment of its balance loan amount from the P.F dues. Explain with reference to the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952

i) Whether the bank can recover the loan amount from the P.F. dues and

ii) If, Instead of the bank, Mrs. Tsunami had taken any loan from her legal representative what would have been the answer?

Provident Fund Act_Practicle Problems_4

M/s Harsh Ltd. has been regularly depositing the P.F. contributions to the Government in respect of the company's contribution as well the employees' contribution. The company is doing well and earning huge profit. But due to reverse market conditions the company suffered loss for the last two years. The management is thinking to reduce the salary/wages of the employees to reduce the company's contribution to P.F. and instead, to pay certain compensatory allowance so that the employee's pay packet remains same. Explain in terms of the provisions of Employee's Provident Fund and Miscellaneous Provisions Act, 1952 whether the company can reduce the salary/wages.

Provident Fund Act_Practicle Problems_3

M/S Atwal & Co. Pvt. Ltd. is engaged by M/s. Mine managers Ltd. for doing operational work at its mines. There are about 300 employees employed by M/s Atwal & Co. Pvt. Ltd. to do the mining operation. M/s Minemanagers Ltd. deducted from the amount payable to M/s Atwal & Co. Pvt. Ltd. a sum of Rs.2,00,000 being the P.F. contribution of the employees engaged by it. M/s Atwal in response to such deduction, deducted from the employees the entire amount of Rs. 2,00,000 in two installments to which the employees protested. Explain in terms of the provisions of Employees' Provident Fund and Miscellaneous Provisions Act, 1952.

i) Whether M/s Atwal & Co. Ltd. Can deduct from the salary/wages of the employee;

ii) Whether it can deduct the employee's contribution from the salary/wages paid to the employees in one installment.

iii) Can it recover the amount from the employees by entering into an agreement with employees?

Provident Fund Act_Practicle Problems_2

Manorama Group of Industries sold its textile unit to Giant Group of Industries. Manorama Group contributed 25% of the total contribution in pension scheme, which was due before sale under the provisions Employees' Provident Fund and Miscellaneous Provisions Act, 1952. The transferee company (Giant Group of Industries) refused to bear the remaining 75% contribution in the Pension Scheme. Decide in the light of the Employee's Provident Fund and Miscellaneous Provisions Act, 1952, who will be liable to pay for the remaining contribution in case of transfer of establishment and upto what extent?

As per Sec.17B of Employees' Provident Fund and Miscellaneous Provisions Act, 1952, Both Manorama Group of industries and giant Group of industries are liable to bear the amount of contribution. However, Giant Group of industries will bear only upto the value of the assets obtained by it.

Provident Fund Act_Practicle Problems_1

The P. F. authorities passed an order in 2000 determining dues from Feedback Co. Ltd. in July 2003 the concerned officer who passed the order issued a notice to the company as to why the amount determined earlier should not be re-determined. Explain in terms of the Employee's Provident Fund and Miscellaneous Provisions Act, 1952 as to power of the concerned officer to re-open the case if any amount hand been escaped his determination.