A Provident fund is a compulsory, government managed retirement savings scheme. The employees that work in companies give a certain amount from their salaries which get deposited as provident fund and are known as employee provident fund. EPF Registration is crucial for employers that have more than 20 employees in their organization.
Employee Provident Fund Organization (EPFO) is the regulatory body that regulates all provisions with regards to EPF Registration.
Employee Provident Fund has many advantages, some of which will be talked about in this section.
- The interest earned from funds that are in the EPF account in exempted from tax
- The amount withdrawn after a certain time period is tax free
- The contributions that an employee makes towards Employee Provident Fund (EPF) are tax deductible as per Section 80C.
- The EPF amount can be withdrawn at the time of emergencies.
- The EPF balances can be withdrawn if the employee decides to leaves the company in which he is currently working
All the employees are eligible for Employee Provident Fund (EPF) from the date in which they join the company. They are eligible for employee insurance and pension.
An EPF (employee provident fund) account is made up of the following
- Contributions made by the employee and the employer
- On a monthly basis at a fixed rate (percentage of salary = basic + DA)
Currently, the contributions that are compulsory are calculated at 12% of Basic + DA. Moreover, there are certain restrictions with regards to EPF contributions; it does not apply when:
- The number of employees in a company is less than 20
- Sick industries
- Beedi, jute, brick, guar gum and coir industries
EPF can be registered online by following the steps mentioned by the Government. The steps are as mentioned below:
Employer Registration
The individual interested in obtaining an EPF Registration must go on the website and select the option “Establishment Registration”. He must complete all details such as name of the establishment, address of the establishment, PAN of the employer etc.
Verification through OTP
The applicant then receives an OTP which he must enter to verify his email address.
Establishment login
The applicant must now login with his email address and password after his credentials have been verified. He must then complete all the other details that are required.
DSC Registration
After completing the establishment registration, the applicant must register for Digital Signature Certificate (DSC).
Registration Certificate
The applicant receives the certificate of registration after he completes all the steps.
KYC of employees
The KYC of all the employees who are working in the company must be updated. Significant details such as their bank statement and Aadhar card must be uploaded by the applicant.
Certain documents that are required by the applicant for successfully registering their company for EPF must be prepared and submitted to the authority.
Documents required for EPF Registration are as mentioned below:
- Name of the employer
- PAN card of the employer
- ID proof such as driving license, passport and voter ID
- Address proof of registered office such as electricity bill, rent agreement
- Copy of certificate of incorporation
- Partnership deed, address proof and ID proof of all the partners if the establishment is a partnership firm
- MOA and AOA, if the company is established as a private or public company
What are some compliances regarding EPF Registration?
- The monthly returns must be filed online through the establishment login by uploading the ECR sheet.
- The returns must be filed online with the 15th of every month.
- The ECR sheet can be downloaded through EPFO in the XML sheet that contains name and UAN of all the employees who register themselves with the establishment during the month in which the return must be filed.
- XML sheet must be converted into a comma-dilemma file for uploading it for return filing.
- Complete the return filing by contributing online payment gateways.
Employee Provident Fund (EPF) is mandatory for all companies that have more than 20 employees working in the company for certain durations. EPF Registration must be undertaken by the company and ensure that employees benefit from the provident fund scheme.
