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Showing posts with label employees provident fund. Show all posts
Showing posts with label employees provident fund. Show all posts

Tuesday, 9 May 2017

08:02

No construction by EPFO, to act as facilitator: Dattatreya

No construction by EPFO, to act as facilitator: Dattatreya

New Delhi, May 8 (PTI) Labour Minister Bandaru Dattatreya today clarified that the retirement fund body EPFO will not construct houses, but become a facilitator for its over four crore members so that they can buy homes.
Labour Ministry intends to facilitate at least 10 lakh subscribers in the period of next two year by allowing them to use 90 per cent of EPF accumulations to make down payments to buy houses and use their accounts for paying EMIs of home loans.
"For housing, the EPFO has nothing to do with construction of houses. It is their (subscribers) responsibility," Dattatreya replied when asked whether the Employees' Provident Fund Organisation (EPFO) would build low cost homes for their subscribers.
Elaborating further about the recent amendment in the Employees' Provident Fund Scheme 1952 for facilitating members to buy homes, the minister said, "The scheme also aims to fulfil the Prime Minister's vision of 'Housing for All By 2022'. Our EPFO subscribers will be the beneficiary of this scheme. We have 4.31 crore EPFO subscribers. We have framed norms for forming group housing societies." 
Earlier, certain section of media had reported that the EPFO will build 10 lakh homes in the next two year time for its subscribers and the body would join hands with Ministry of Urban Development for the purpose.
The minister said, "The scheme can be availed by the subscribers getting monthly basic wages of below Rs 15,000.
The scheme will be aligned with the urban development ministry (programmes) and other organisations because Government of India is also giving subsidy of Rs 1.5 lakh to weaker sections (to buy houses)." 
He said that the government is also providing interest subsidy for certain section of people for buying home and all benefits can be clubbed together.
The minister also talked about the proposal of raising wage ceiling for coverage under the EPFO from existing Rs 15,000 to Rs 25,000, which would be shortly taken up in next meeting of body's trustees.
Source:PTINEWS
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Friday, 28 April 2017

17:03

Ministry of Labour & Employment has amended Paragraph 68-J and Paragraph 68-N of Employees’ Provident Fund Scheme, 1952

Ministry of Labour & Employment has amended Paragraph 68-J and Paragraph 68-N of Employees’ Provident Fund Scheme, 1952
EPF members now required to submit self-declaration for advance in case of illness of members/ dependents 

EPF members will now only be required to submit a self-declaration for the advance in case of illness of members/ dependents. Differently abled members will also get advance on the basis of self-declaration. A member will no longer be required to submit any medical certificate or any other certificate or document or proforma whatsoever to avail advances under paragraph 68-J or under paragraph 68-N of EPF Scheme 1952. 

Ministry of Labour & Employment has amended Paragraph 68-J and Paragraph 68-N of Employees’ Provident Fund Scheme, 1952 and It will come into force from the date of its publication in the official Gazette. According to it, a member would only be required to submit a self-declaration, which has already been included in the composite claim form, to avail advance under the EPF Scheme in case of illness of members/ dependent and also in case of differently abled members. 

This is in continuation of initiatives taken by EPFO as part of next phase of its e-governance reforms with a view to make the services of EPFO available to its stakeholder in an efficient and transparent manner. An administrative order was issued on 20.02.2017 in the matter of Introduction of Composite Claim Forms (Aadhar and Non-Aadhar ) to replace existing Claim Forms No. 19, 10C & 31 and Forms No. 19 (UAN), 10C(UAN) & 31 (UAN). EPFO has since implemented Universal Account Number (UAN) for its subscribers. It is now possible for subscribers, who have seeded their UAN with Aadhar Number and Bank account details, to submit claim forms directly to EPFO without the attestation of employers. \

Source:PIBNEWS 
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Sunday, 6 November 2016

09:05

Employees Provident Funds Contribution and Service

Employees Provident Funds Contribution and Service

Here's how an employee can keep track of his EPS amount 

An individual switches jobs and usually transfers the Employees' Provident Fund (EPF) balance to the new employer. But what happens to the funds in the Employees' Pension Scheme (EPS) continues to remain a mystery for many. While the PF account number of the new employer shows the transferred EPF balance, what about the EPS money from the previous employer? 

Here are a few pointers on how the EPS works and how one can avail it: 

An employee contributes 12 per cent of his basic salary directly towards EPF. 

*He does not contribute directly towards EPS. 

*Of the employer's share of 12 per cent, 8.33 per cent is diverted towards the EPS, with a cap of Rs 1,250 (earlier Rs 541) a month. 

*When the employee switches jobs, the EPF gets transferred to the new employer, but not the EPS. 

*When the employee switches jobs, the EPS contributions stay with the EPFO. 

**The employee has the option to either withdraw the EPS amount or carry it forward to the next job. This, however, depends on the length of his service and his age. 

Less than 10 years in job 
If an employee has not completed 10 years in service, he can either withdraw the EPS amount, or take the 'scheme certificate'. If he is still working, but hasn't completed 10 years, this, however, is not possible. He can apply only after he has quit his job, i.e., before joining another company. 

The option to withdraw or take the scheme certificate has to be submitted by filling Form 10C, which can downloaded here . Recently, the EPFO introduced 'UAN based Form 10C', which can be downloaded here . 

This form can only be used by an individual who has furnished employee details to the existing employer in 'Form 11-New' ( download here ), furnishing the Aadhaar, bank details, and after getting the Universal Account Number (UAN) activated by providing a cancelled cheque with name, account number and IFS Code. Currently, UAN based Form 10C can only be used for withdrawal and not for taking the scheme certificate. 

If you have worked for less than six months, the EPS contributions cannot be withdrawn as the EPFO rules say that for those who have not yet completed 180 days in the organisation, the withdrawal benefit is not admissible. One can, however, apply for the scheme certificate. 

The employee won't get the entire contribution (Rs 541/Rs 1,250 a month) back after applying through Form 10C. The amount received will be subject to Table D as below. 




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Saturday, 15 October 2016

21:38

Transfer of PF money gets easier

Transfer of PF money gets easier

The new declaration form (New Form No. 11) will replace the existing Form No. 11 (New)
Often, when people change jobs, they end up creating new employee provident fund (EPF) accounts, instead of transferring the old one to the new employer. Part of the reason for this was that employees found the transfer process complicated and preferred to open a new account instead.

In an effort to make it easier for subscribers to transfer their accounts, the Employees Provident Fund Organisation (EPFO) has introduced a new form to transfer the accounts. It is available on the EPFO’s website, for employers as well as employees.

Account Transfer

The new declaration form (New Form No. 11) will replace the existing Form No. 11 (New). (Your read it right. Seems EPFO is out of ways to identify the ‘new’ on this form!)

The form requires information about the previous employment and the know-your-customer (KYC) details.

According to the EPFO, it has been observed since the launch of Universal Account Number (UAN, which is allotted to employees by the EPFO), that multiple UANs were being generated by the subscribers.

The EPFO found this out because many UANs, allotted by the employers, were not being updated with the date of exit. Obviously, many EPFO members were creating new UANs when they changed jobs. Another reason for generation of multiple UANs is that, sometimes the declarations (for example: phone number or marital status) made to the old employer do not match those provided to the new employer. And, if such an employee does not know her old UAN number, a new one will be created.

Not only the newer form is simpler to fill, it is also available as an e-form on the EPFO’s website www.epfndia.gov.in.

Besides transferring the account, the new form can also be used for transfer of accumulated funds from the old accounts to the new one associated with the new employer.

Earlier, in order to transfer the funds from one organisation to another, an employee had to fill a separate Form No. 13. The process was complex and transfer of funds usually took a long time. Because of that many employee preferred withdrawal their funds rather than transferring them to new account.

The step to simplify the transfer process will help in bringing down the premature withdrawals too.

However, only those members who have been allotted UAN, and whose KYC details have been digitally verified by the previous employer, are exempt from filling the Form No. 13 separately.

So those who still don’t have their UAN, should generate it. If your existing employer is not cooperating, you can generate it on your on too. EPFO has given facility to get the UAN online from its portal http://uanmembers.epfoservices.in/.

At the end of September 2016, more than 28.9 million EPF members have activated their UAN on the UAN portal.
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Wednesday, 27 April 2016

08:14

Ministry asks RBI to examine Workers' Bank proposal

Ministry asks RBI to examine Workers' Bank proposal

The Labour Ministry has asked the Reserve Bank of India (RBI) to form a panel headed by a former Deputy Governor of the central bank to look into a proposal of creating a Workers' Bank using Employees’ Provident Fund (EPF).
“We need to know whether the proposal to set up a Workers’ Bank is feasible or not. We have taken up the matter with the RBI to nominate a retired Deputy Governor to seek opinion on the matter. A reminder was also sent to the RBI in February this year,” a senior Labour Ministry official said on condition of anonymity.
The proposal was mooted by the trade unions about a decade ago and has been discussed by Labour Ministry and Employees’ Provident Fund Organisation (EPFO) for several years now.
In 2004, the Congress-affiliated Indian National Trade Union Congress (Intuc) had first submitted a theme paper to the government on setting up ‘Workers’ Capital Trust’ to improve the earnings of Employees’ Provident Fund Organisation (EPFO) by investing its corpus in various instruments.
The idea was modelled on similar experiences in countries like Canada, Netherland, Switzerland and South Africa where a collective pension fund system invests worker’s savings in equities of domestic and global markets.
As on 31 March 2015, EPFO’s total corpus stood at Rs.6.34 lakh crore. Various committees set up to review the proposal had suggested that EPFO should concentrate on its core activities and were not in favour of the Workers’ Bank. However, the idea was revived after the National Democratic Alliance (NDA) government took charge in May 2014.
The Labour Ministry has also sought the opinion of Department of Financial Services in the Finance Ministry on the proposal.
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Saturday, 19 March 2016

08:29

Reduction of Interest Rates on Public Provident Fund


Reduction of Interest Rates on Public Provident Fund
March 18, 2016 

Reduction of Interest Rates on Public Provident Fund

Interest Rates on various Small Savings Schemes for the 1st Quarter of 2016-17 notified;. Additional Interest Rate spreads which the Government allows on Small Savings Schemes like PPF, Senior Citizen Savings Scheme, Sukanya Samridhi Scheme and NSC etc. are being continued and included in the rates notified today.

From the year 2012-13, the interest rates on various Small Savings Schemes (SSS) are recalculated and notified in the month of March every year. These rates are applicable for the next financial year. This is being done in line with the recommendations of the Shyamala Gopinath Committee to ensure that the interest rates of Small Savings Schemes are market linked.

Accordingly, as done in the previous years, the interest rates for various Small Savings Schemes were due for recalculation in March 2016. As notified on 16th February, 2016, instead of annual resetting of interest rates for the next financial year, the interest rates from now on will be reset every quarter based on the G-Sec yields of the previous three months. Consequently, the interest rates for various Small Savings Schemes were recalculated with reference to the G-Sec yields of equivalent maturity for the months December 2015 to February 2016. Based on this calculation, the interest rates on various Small Savings Schemes for the 1st quarter of 2016-17 have been notified today. The rates of interest on various small savings schemes for the First Quarter of Financial Year 2016-17, on the basis of the interest compounding/payment built-in in the schemes, shall be as under:


This is a formula driven process.

Further, as notified earlier, the additional interest rate spreads which the Government allows on Small Savings Schemes like PPF, Senior Citizen Savings Scheme, Sukanya Samridhi Scheme, NSC etc. are being continued. The additional spread for these Schemes are 25 basis points for PPF, 100 basis points for Senior Citizen Savings Scheme, 75 basis points for Sukanya Samridhi Scheme, 25 basis points for five year time deposit, 25 basis points for National Savings Certificate and 25 basis points for Monthly Income Scheme. These additional interest rate spreads are being continued and are included in the rates notified today.

The quarterly revision of interest rates will ensure that the interest rates under Small Savings Schemes are more dynamically related to the current market rates, thereby enabling the Banks to move their interest rates in line with current money market rates.

Source: PIB News
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Friday, 30 October 2015

07:35

PF withdrawn before 5 years of continuous employment is taxed

PF withdrawn before 5 years of continuous employment is taxed

The aggregate of employer’s contribution to PF and interest earned thereon will be taxable as salary

I have been working with a company for the past four years—this is my first job. However, I am planning to move to another company. Does the Employees’ Provident Fund become taxable if I quit and withdraw the accumulated provident fund (PF) amount. Is there a way to save tax on this type of withdrawal?

—Sameer Motwani

An individual has to pay tax on withdrawal of PF accumulations if the same has been withdrawn from a recognized PF account without rendering continuous services for five years or more with the employer.

On change in employment in the past, if the accumulated PF balance has been transferred to the PF account of the new employer, then the period of previous employment should also be considered as part of continuous service and accordingly, the five years is computed.

Since this is your first job with the current employer and the total period of service with the employer is less than five years (i.e., four years), if you withdraw the PF balance, it shall be taxable in the financial year (FY) of withdrawal.

The aggregate of employer’s contribution to PF and interest earned thereon will be taxable as salary.

Further, to the extent of the deduction claimed by you under section 80C of the Income-tax Act, 1961, on your own contribution to the recognized PF shall be taxed as salary.

Also, the interest earned on your own contribution to PF shall be taxed as “income from other sources”. The tax rate would depend on your applicable income slab in each of the FY(s) during which the PF contributions were made. Further, the surcharge (as applicable) and education cess, shall be applicable, for each of the FYs will also be payable in addition to the basic income tax.

You would be entitled to avail relief under section 89.

Tax will be deducted at source at 10% if the taxable PF amount is more than Rs.30,000 and provided the Permanent Account Number (PAN) of the individual is available. If PAN is not available, then tax would be deducted at maximum marginal rate.

However, if you transfer the accumulated PF balance maintained with the current company to the PF account maintained with new employer upon change in job and later on withdraw the accumulated PF balance, the period of services rendered with current company will also then be included.

The withdrawal has to be as per the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 (PF provisions).

If the cumulative years of service with the current and new employer are more than five years, the withdrawal will not trigger tax liability.

The withdrawal of PF will be as per the aforesaid provisions, which requires you to have a non-employment period of two months after leaving your job.

 Source:Livemint

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Sunday, 9 August 2015

17:04

The Minister had said EPFO will initially put only 5 per cent of its incremental fund flow (around Rs 5,000 crore) but the cap could be raised to 15% next year.

The Employees Provident Fund Organisation (EPFO), which has started investing in equities, would pump in about Rs 5,000-6,000 crore in this asset class by the end of current fiscal and further flow will depend on market returns, a Union Minister said on Saturday.

The state-run pension fund's Central Board of Trustees (CBT) would be asked to speed up the investment process, Union Minister of State for Labour Bandaru Dattatreya said here.

"For the first time, EPFO has taken this new initiative.

Through Exchange Traded Funds, we are going to have participation under equity class. The process has already begun.

"Our portfolio managers, the SBI and others, they are on that job. Our Ministry has also formed some guidelines. With those guidelines and every month, we are progressing," he said.

"By end of this financial year (FY16), approximately Rs 5,000-6,000 crore will be in the markets. After that financial year, we will review the situation, how the things are going on, how the markets are giving benefits, then we will take further decisions," he told PTI here.

Dattatreya expressed confidence that the process of investment in equities would give higher returns with the investments by EPFO being made with a long-term perspective.

"Our Central Board of Trustees (CBT) are there. I will definitely talk to them. This pattern of investment is long-term. In the long-term, equity participation will definitely get good results.

"Yesterday, I had lot of discussions in Mumbai also. A lot of people are welcoming (the initiative). This is a slow process. In the month of January and this month also, we wanted to call a CBT meeting, apprise them about situation and speed up the process," he said.

Marking its maiden entry into stock market, the retirement fund body on August 6 announced its first equity investment through Exchange Traded Funds benchmarked to key indices Sensex and Nifty and promised to invest more than the current limit of Rs 5,000 crore from the next year.

The first investment would be made through SBI Mutual Fund's two index-linked ETFs - one to the BSE's Sensex and the other to NSE's Nifty.

The Minister had said EPFO will initially put only 5 per cent of its incremental fund flow (around Rs 5,000 crore) but the cap could be raised to 15% next year. 

 Source: DNAINDIA.
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