Abstract of the Payment of Wages Act, 1936
and the Rules made thereunder
Whom the Act affects
Definition of Wages
Responsibility for and Method of Payment
Fines and deductions
Inspections
Complaints of Deductions or Delays
Appeal against the Authority
Que.: In what circumstances LTA is tax exempted?
Que.: Can the entire amount of travelling cost be claimed?
Que.: Can both husband and working spouse claim for LTA?Ans.: No, LTA cannot be claimed twice for the same journey.
Ans.: Yes, if an Employee does not avail LTA during the block of 4 years, he can utilize the pending LTA in the first year of the subsequent block and thus can travel more three times in the same block of years.
These are the features of new facility of e-passbook introduced by the EPFO department.
- The facility to download e-passbook is available on http://members.epfoservices.in/.
- The members of provident fund who have active account can download e-passbook every month if return cum challan is download by the employer of the member.
- Inactive members who have not settled accounts can request for a passbook.
- Provident fund members can register himself/herself with one of the ID proof as username and the mobile number as password. Id proof may be PAN card, Aadhar Card, Driving license, NPR, Passport, Voter ID card, Ration card etc.
- After registration one can download the e-passbook with their account.
- If there is no passbook available for download, the request will be added automatically and a sms will be send to the registered mobile number when the passbook will be available for download.
- Members can add multiple ID (identification) numbers after registration and can use any one for logging into their accounts.
- The e-Passbook shall contain transaction-wise details of account (all credits and debits) since the month for which the details for the establishment have been processed in new application software at the field offices.
- The e-Passbook shall contain transaction-wise details of account (all credits and debits) since the month for which the details for the establishment have been processed in new application software at the field offices.
- The facility, however is not available for the members under establishments that are exempted under the EPF Scheme 1952 (as the fund details are maintained by the Trust), Inoperative members (i.e in accounts where no contribution has been received during preceding 36 months).
However, the facility will have following restrictions:-
- Only one registration is permitted against one mobile number.
- The member can download the passbook for only one account number under one establishment. Thus in case he/she has worked for different spells in one establishment with different account numbers, he/she has to apply for the transfer of the old account to the new so that the credit may be reflected in the e-pass book of the new account.
- To view the amount balance against any inoperative account also the member should apply for transfer and then the transferred amount will reflect as credit in the present account of the member.
Dear All,
In order to minimize the return /rejection ratio of PF claims, PF authorities have decided to credit the PF claim amount in Joint Account (Bank) provided, the bank account is maintained with his/her spouse
PLS download the Said Attachment
Joint account
Immediate settlement without waiting period of 2 months
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Settlement only after a waiting
period of two months |
69(1)(a) Retirement after attaining 55 years of age.
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69(1)(e)(i) transfer of a non retrenched employee from a closed establishment to uncovered establishment.
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69(1)(b) Retirement on account of total and permanent incapacity due to bodily or mental infirmity .
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69(1)(e)(ii) Transfer of an employee from a covered establishment to an un-covered establishment under the same employer.
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69(1)(d) Termination of service on retrenchment.
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69(2) Other cases viz. Resignation, Leaving service, etc.
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69(1)(dd) Termination on V.R.S
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Note: For female members leaving service for the purpose of getting married; waiting period not applicable.
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69(1)(c) Migration from India for permanent settlement abroad or taking employment abroad. |
69(1)(e)(iii) Members discharged & retrenchment compensation paid under I.D. Act 1947. |
Settlement under para 70:
(Accumulation of a deceased member) throughForm No. 20
70(i) If a nomination exists, payment is made to the nominee in accordance with Form 2(R) . (Nomination and Declaration Form).
70(ii) If no nomination subsists, payment is to be made to every member of his family (as defined under para-2(g) of Employees’ Provident Fund Scheme 1952) in equal share. For the purpose of this paragraph, a member’s posthumous child, if born alive , shall be treated as a surviving child, born before the member’s death.
But the following will not be eligible for any share, if other family members are available to receive the accumulations.
70(iii) In cases where para 70(i), 70(ii) , does not apply, the payment is to be made to the person who is legally entitled to it, vide para 70(iii). In case there is no nominee and also there is no person entitled to receive the amount, if the amount to the credit of the fund does not exceed Rs. 10,000/-, the Commissioner may pay such amount to the claimant after enquiry and after satisfying the title of the claimant.
Note: Maximum amount payable by money order is Rs.2000/- and beyond that by cheque. If the amount is beyond Rs. 500/-, the M.O. cost will be borne by the claimant.
Para 70(A):
If a person entitled to received a share in the Provident Fund accumulations of a deceased member is charged with committing the murder of the member or with abetting the crime, the share payable to such person shall be retained till the case is finalised . If, subsequently he/she is exonerated, the share will be paid to him/her. If such a person is found guilty and convicted, the share will be paid equally to other person(s) entitled to receive the accumulations.
Types of Benefit
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Eligibility
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Eligible Amount
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Form
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Documentary Support
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The purchase of site for construction of house
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5 Years of membership of the Fund (Minimum balance in member’s a/c should be Rs. 1000/-)
* The purchase should be in favour of member or member & spouse. |
l 24 months wages (Basic & DA)
OR l Member’s own share of contribution + Company’s share of Contribution with interest thereon |
No.31
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A declaration from the member that, dwelling site or dwelling house/flat or the house under construction is free from encumberances and the same is under the title of the member or the spouse (notification dated 25.2.2000)
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The Construction of House
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5 Years of membership of the Fund
(Minimum balance in member’s a/c should be Rs. 1000/-) |
l 36 months wages (Basic+DA)
OR l Members own share of contribution + Company’s share of contribution with interest thereon |
No.31
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A declaration from the member that, dwelling site or dwelling house/flat or the house under construction is free from encumberances and the same is under the title of the member or the spouse (notification dated 25.2.2000)
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The purchase of dwelling flat
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5 Year of membership of the Fund
(Minimum balance in member’s a/c should be Rs. 1000/-) |
l 36 months wages (Basic+DA)
OR l Members own share of contribution + Company’s share of contribution with interest thereon |
No.31
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A declaration from the member that, dwelling site or dwelling house/flat or the house under construction is free from encumberances and the same is under the title of the member or the spouse (notification dated 25.2.2000)
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Additions, Alterations or improvements to the dwelling house
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5 years from the date of completion of dwelling house
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12 months basic or members own share of contribution with thereon.
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No.31
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Types of Benefit
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Eligibility
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Eligible Amount
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Form
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Documentary Support
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Advance from the fund for repayment of loan
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10 years membership of the fund & member should have taken loan from Govt. Body
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36 month wages (Basic + DA)
OR Members own share of Contribution + Company’s share of Contribution with interest thereon. |
No.31
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A certificate from the lending authority furnishing the details of loan and outstanding amount.
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Types of Benefit
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Eligibility
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Eligible Amount
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Form
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Documentary Support
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Advance from the fund for illness viz. hospitalisation for more than a month, major surgical operation or suffering from TB, Leprosy, Paralysis, Cancer, Heart ailment etc.
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Stay in Hospital at least for a month
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6 moths wages (Basic + DA)
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No.31
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A certificate from the Medical Practitioner for hospitalisation or operation.
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Types of Benefit
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Eligibility
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Eligible Amount
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Form
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Documentary Support
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l Advance from the fund for Marriage of self/son/daughter/ sister/brother etc.
l Advance from the fund for education of Son/Daughter |
l 7 years membership of the fund & minimum balance in member’s account should be Rs. 1000/-
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l 50% of member’s own share of contribution
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No.31
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Declaration by the member which is attested by the employer.
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Types of Benefit
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Eligibility
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Eligible Amount
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Form
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Documentary Support
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Grant of advance in abnormal conditions, Natural calamities etc.
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l Certificate of damage from appropriate authority.
l State Govt. declaration. |
l Rs. 5000/- or 50% of member’s own share of contribution (To apply within 4 months)
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No.31
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l Certificate from the Appropriate Authority.
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Types of Benefit
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Eligibility
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Eligible Amount
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Form
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Documentary Support
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Grant of advance to members affected by cut in the supply of electricity
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l The advance may be granted only to a member whose total wages for any one month commencing from the month of January 1973 were 3/4th or less than 3/4th of wages for a month
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l Wages for a month
OR l Rs.300/- |
No.31
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Certificate from State Govt. regarding cut in the supply of electricity.
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Types of Benefit
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Eligibility
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Eligible Amount
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Form
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Documentary Support
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To Physically Handicapped member for purchase of an equipment required to minimize the hardship on account of handicap.
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Production of medical certificate from a competent medical practitioner to the effect that he is physically handicapped
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Basic wages+ DA for six months
or own share of contribution with interest or cost of equipment which ever is least. |
No.31
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Certificate from the Medical practitioner to the effect that the member is physically handicapped..
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Note: For calculation/ computing the period of membership U/P 68B, 68BB, 68K, total service exclusive of periods of break under the same employer before the scheme is applied to him, as well as period of membership of the fund is always included.
An International worker may be an Indian worker or a foreign national.
– Any Indian employee working or having worked abroad in a country with which India has entered into a Social Security Agreement (SSA); OR
– Any foreigner working in India in an establishment where the Employees‟ Provident Funds & Miscellaneous Provisions Act, 1952 is applicable.
2) Who is an ‘excluded employee’ under these provisions?
A detached International Worker contributing to the social security programme of the home country and certified as such by a Detachment Certificate for a specified period in terms of the bilateral SSA signed between that country and India is an ‘excluded employee’ under these provisions.
3) Who all shall become the members of the Fund?
a) Every International Worker, other than an ‘excluded employee’ – from 1st Nov. 2008.
b) Every excluded employee, on ceasing the status – from the date he ceases to be excluded employee.
4) Which category of establishments shall take cognizance of these provisions?
All such establishments covered/coverable under the EPF & MP Act, 1952 (including those exempted under section 17 of the Act) that employ any person falling under the category of ‘International Worker’ shall take cognizance of these provisions.
5) Whether PF rules will apply to an employee if his salary is paid outside India?
Yes, the provisions will apply irrespective of where the salary is paid.
6) Whether PF will be payable only on the part of salary paid in India in case of split payroll?
In case of split payroll the contribution shall be paid on the total salary earned by the employee.
7) ‘Monthly Pay’ for calculating contributions to be paid under the Act?
The contribution shall be calculated on the basis of monthly pay containing the following components actually drawn during the whole month whether paid on daily, weekly, fortnightly or monthly basis:
Basic wages
Dearness allowance (all cash payments by whatever name called paid to an employee on account of a rise in the cost of living)
Retaining allowance
Cash value of any food concession
8) What portion of salary on which PF would be payable in case an individual has multiple country responsibilities and spends part of his time outside India?
Contribution is payable on the total salary payable on account of the employment of the employee employed for wages by an establishment covered in India even for responsibility outside India.
9) Is there a minimum period of days of stay in India which the employee can work in India without triggering PF compliance?
Every eligible International Worker has to be enrolled from the first date of his employment in India.
10) What constitutes pensionable service?
“Pensionable Service” means the service rendered by the member for which contributions have been received or are receivable and the period of coverage earned in another country and considered as eligible under a relevant social security agreement
11) Is there a cap on the salary up to which the contribution has to be made by both the employer as well as the employee?
No, there is no cap on the salary on which contributions are payable by the employer as well as employee.
12) Is there a cap on the salary up to which the employer’s share of contribution has to be diverted to EPS?
No, there is no cap on the salary up to which the employer‟s share of contribution has to be diverted to EPS, 1995 and the same is payable on total salary of the employee.
13) What is a Social Security Agreement (SSA)?
A Social Security Agreement is a bilateral instrument to protect the social security interests of workers posted in another country. Being a reciprocal arrangement, it generally provides for equality of treatment and avoidance of double coverage.
14) What are the provisions covered in a Social Security Agreement (SSA)?
Generally a Social Security Agreement covers 3 provisions. They are:
Detachment:
Applies to employees sent on posting in another country, provided they are complying under the social security system of the home country.
Exportability of Pension:
Provision for payment of pension benefits directly without any reduction to the beneficiary choosing to reside in the territory of the home country as also to a beneficiary choosing to reside in the territory of a third country.
Totalisation of Benefits:
The period of service rendered by an employee in a foreign country is counted for determining the “eligibility” for benefits, but the quantum of payment is restricted to the length of service, on pro-rata basis.
15) What is the status of the Social Security Agreements (SSA)?
As on 01.04.2011, three Social Security Agreements in respect of Belgium, Germany and Switzerland have been made effective from 1st September, 2009, 1st October, 2009 and 29th January, 2011 respectively. Apart from the above, SSAs have already been signed with France, the Netherlands, Czech Republic, Denmark, Hungary, Norway, Luxembourg, and Republic of Korea, but not yet made effective. Negotiations are at various stages with Canada, Quebec, Sweden, Australia, USA and Austria. Government level talks are on with many other countries where sizable numbers of Indian workers are employed.
16) Should the eligible employees from any country other than Belgium, Germany and Switzerland contribute as International Worker till such time the ‘date of effect’ of the SSA is notified for the particular country?
Yes, the International Workers from any country other than Belgium, Germany and Switzerland shall be enrolled as members of EPF till such time that the ‘date of effect’ of the SSA is notified by the Government of India and after such workers obtain a ‘detachment certificate’ from the appropriate authority in their countries. Till the ‘date of effect’ is notified, no Indian employee posted to these countries and none of the employees from these countries working in India shall be eligible for detachment status.
17) Regarding Indian employees working abroad and contributing to the Social Security Scheme of that country with whom India has a Social Security Agreement, are they coverable for PF in India or treated as excluded employees?
An Indian employee sent on posting to a country with which India has an SSA becomes an „International Worker‟ and is required to contribute on full salary. He can, however, seek exemption from the social security legislation of the country in which he is posted on the basis of a detachment certificate issued in terms of the SSA. If an Indian employee is directly employed by a local employer abroad, such an employee shall be covered by the foreign country legislation.
18) Regarding Indian employees working abroad and contributing to the social security scheme of a country with which India DOES NOT have a Social Security Agreement, are they coverable for PF in India?
If an Indian employee prior to his posting abroad qualifies/happens to be a contributing member of the EPF, he will continue to be a member of the EPF during his posting to a country with which India does not have an SSA.
19) Whether foreign nationals employed in India and being paid in foreign currency are coverable?
Yes, International Workers drawing salary in any currency and in any manner are to be covered.
20) Whether foreigners employed directly by an Indian establishment are coverable?
Foreigners employed directly by an Indian establishment would be coverable under the EPF and MP Act, 1952 as IWs and would not be eligible for the benefit of detachment under a SSA.
21) Considering that in most countries issuance of work permit to an individual is a trigger for social security compliance, whether the purpose and type of visa i.e. business/employment will be a determinant for a person to be considered as an International Worker?
The purpose of the visit of an individual is the main determinant for social security compliance. The type of visa may help in determining the purpose of visit. For example – a foreign national coming into India under an employment visa is deemed to be working in India.
22) Whether benefit of reciprocity can be extended to an International Worker if his home country provides for exemption from social security to Indian nationals going to work in that country under its domestic law even though there is no Social Security Agreement with India?
In the absence of a formal agreement, the benefit of reciprocity is not available to an International Worker. This implies that it is mandatory to enrol all International Workers, except those carrying a valid detachment certificate under an SSA.
23) What is the criterion for receiving the withdrawal benefit for services less than 10 years under EPS, 1995?
Only those employees covered by a SSA will be eligible for withdrawal benefit under the EPS, 1995, who have not rendered the eligible service (i.e. 10 years) even after including the totalisation benefit as may be provided in the said agreement. In all other cases, withdrawal benefit under the EPS, 1995 will not be available to International Workers for contributory service less than 10 years.
24) Where will the survivor benefits be delivered in case of a covered employee holding a passport, being other than an Indian passport, issued by a country with which India does not have a SSA?
In the absence of a SSA, the survivor benefits such as widow/widower pension, children /orphan pension, nominee/parent pension, etc. as the case may be, shall be payable to the bank account of the eligible beneficiary in India.
25) How long can an Indian employee retain the status of “International Worker”?
An Indian employee attains the status of “International Worker” only on account of employment in a country with which India has signed SSA. He/she shall remain in that status till the time he/she avails the benefits under a social security programme covered under that SSA.
26) Under what condition the contributions received in the PF account are payable along with interest?
The full amount standing to the credit of a member’s account is payable if anyone of the circumstances mentioned under amended Para 69 of the EPF Scheme, 1952 is fulfilled, namely:-
(i) On retirement from service in the establishment at any time after 58 years of age;
(ii) On retirement on account of permanent and total incapacity for work due to bodily or mental infirmity, duly certified by the authorised medical officer;
(iii) In accordance with the terms and conditions provided in an SSA.
27) Is there a cap on the salary up to which the contribution has to be made under the EDLI Scheme, 1976 by the employer?
Yes, the cap on the salary up to which contribution has to be made under the EDLI Scheme, 1976 remains unchanged at Rs. 6,500.
********** End of FAQs **********
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Prakash Kagalwala
Prakash Consultancy Services