"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
then 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 dose not
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 pare 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
'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:
(ii) Medical Care
(iv) Family obligation
(v) Education of Children
(vi) Financing of Insurance Polices
How the Employees' Provident Fund Scheme works:
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:
Any covered establishment with less then 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
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.
Employees' Provident Fund Interest rate:
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.
A) 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 withdraw by the member under the following
A member who has not attained the age of 55 year at the time of termination of
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.
B) 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, 1947.
Withdrawal before retirement:
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 Fund Office.
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 Office.
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 de 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.