"Employee" as defined in Section 2(f) of the Act means any person who
is employee for wages in any kind of work manual or otherwise, in or in connection
with the work of an establishment and who gets wages directly or indirectly from
the employer and includes any person employed by or through a contractor in or in
connection with the work of the establishment.
All the employees (including casual, part time, Daily wage contract etc.) other
than an excluded employee are required to be enrolled as members of the fund the
day, the Act comes into force in such establishment.
"Basic Wages" means all emoluments which are earned by employee while
on duty or on leave or holiday with wages in either case in accordance with the
terms of the contract of employment and witch are paid or payable in cash, but does
- The cash value of any food concession.
- Any dearness allowance (that is to say, all cash payment by whatever name called
paid to an employee on account of a rise in the cost of living), house rent allowance,
overtime allowance, bonus, commission or any other allowance payable to the employee
in respect of employment or of work done in such employment.
- Any present made by the employer.
"Exclude Employee" as defined under para 2(f) of the Employees' Provident
Fund Scheme means an employee who having been a member of the fund has withdraw
the full amount of accumulation in the fund on retirement from service after attaining
the age of 55 years; Or An employee, whose pay exceeds Rs. Five Thousand per month
at the time, otherwise entitled to become a member of the fund.
'Pay' includes basic wages with dearness allowance, retaining allowance,
(if any) and cash value of food concessions admissible thereon.
Employee Provident Fund Scheme:
Employees' Provident Fund Scheme takes care of following needs of the members:
How the Employees' Provident Fund Scheme
- Family obligation
- Education of Children
- Financing of Insurance Polices
As per amendment-dated 22.9.1997 in the Act, both the employees and employer contribute
to the fund at the rate of 12% of the basic wages, dearness allowance and retaining
allowance, if any, payable to employees per month. The rate of contribution is 10%
in the case of following establishments:
Employees' Provident Fund Interest rate:
- Any covered establishment with less than 20 employees, for establishments cover
prior to 22.9.97.
- Any sick industrial company as defined in clause (O) of Sub-Section (1) of Section
3 of the Sick Industrial Companies (Special Provisions) Act, 1985 and which has
been declared as such by the Board for Industrial and Financial Reconstruction,
- Any establishment which has at the end of any financial year accumulated losses
equal to or exceeding its entire net worth and
- Any establishment engaged in manufacturing of (a) jute (b) Breed
(d) coir and (e) Guar gum Industries/ Factories. The contribution
under the Employees' Provident Fund Scheme by the employee and employer will
be as under with effect from 22.9.1997.
The rate of interest is fixed by the Central Government in consultation with the
Central Board of trustees, Employees' Provident Fund every year during March/April.
The interest is credited to the members account on monthly running balance with
effect from the last day in each year. The rate of interest for the year 1998-99
has been notified as 12%. The rate of interest for 99-2000 w.e.f. 1.7.99 was 11%
on monthly balances. 2000-2001 CBT recommended 10.25% to be notified by the Government.
Withdrawal before retirement:
- A member of the provident fund can withdraw full amount at the credit in the fund
on retirement from service after attaining the age of 55 year. Full amount in provident
fund can also be withdrawn by the member under the following circumstance:
- A member who has not attained the age of 55 year at the time of termination of service.
- A member is retired on account of permanent and total disablement due to bodily
or mental infirmity.
- On migration from India for permanent settlement abroad or for taking employment
- In the case of mass or individual retrenchment.
- In the case of the following contingencies, the payment of provident fund be made
after complementing a continuous period of not less than two months immediately
preceding the date on which the application for withdrawal is made by the member:
- Where employees of close establishment are transferred to other establishment, which
is not covered under the Act:
- Where a member is discharged and is given retrenchment compensation under the Industrial
Dispute Act, 194
A member can withdraw upto 90% of the amount of provident fund at credit after attaining
the age of 54 years or within one year before actual retirement on superannuation
whichever is later. Claim application in form 19 may be submitted to the concerned
Provident Fund Office.
Accumulations of a deceased member:
Amount of Provident Fund at the credit of the deceased member is payable to nominees/
legal heirs. Claim application in form 20 may be submitted to the concerned Provident
Transfer of Provident Fund account:
Transfer of Provident Fund account from one region to other, from Exempted Provident
Fund Trust to Unexampled Fund in a region and vice-versa can be done as per Scheme.
Transfer Application in form 13 may be submitted to the concerned Provident Fund
The member of Provident Fund shall make a declaration
in Form 2, a nomination conferring the right to receive the amount that may stand
to the credit in the fund in the event of death. The member may furnish the particulars
concerning himself and his family. These particulars furnished by the member of
Provident Fund in Form 2 will help the Organization in the building up the data
bank for use in event of death of the member.
Annual Statement of account:
As soon as possible and after the close of each period of currency of contribution,
annual statements of accounts will be sent to each member through of the factory
or other establishment where the member was last employed. The statement of accounts
in the fund will show the opening balance at the beginning of the period, amount
contribution during the year, the total amount of interest credited at the end of
the period or any withdrawal during the period and the closing balance at the end
of the period. Member should satisfy themselves as to the correctness f the annual
statement of accounts and any error should be brought through employer to the notice
of the correctness Provident Fund Office within 6 months of the receipt of the statement.