Overview

The Employees' Provident Fund (EPF) registration is mandatory for organizations in India with 20 or more employees. Governed by the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, EPF is a social security scheme under which both employer and employee contribute a portion of the employee’s salary to build a retirement corpus. The EPF program is managed by the Employees' Provident Fund Organization (EPFO), which ensures that employees have access to financial support post-retirement.

Overview

The Employees’ Provident Fund (EPF) registration is mandatory for organizations in India with 20 or more employees. Governed by the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, EPF is a social security scheme under which both employer and employee contribute a portion of the employee’s salary to build a retirement corpus. The EPF program is managed by the Employees’ Provident Fund Organization (EPFO), which ensures that employees have access to financial support post-retirement.

Benefits

  1. Retirement Savings: EPF accumulates savings over an employee’s career, ensuring a steady income after retirement.
  2. Tax Benefits: Contributions to EPF are eligible for tax deductions under Section 80C of the Income Tax Act.
  3. Financial Security: EPF includes benefits like insurance coverage (EDLI scheme) and pension for the employee’s family in case of premature death.
  4. Loan and Withdrawal Facility: Employees can take loans or partial withdrawals from EPF during emergencies like medical needs, education, or house purchase.
  5. Employer Branding: EPF registration reflects an employer’s commitment to the financial security of employees, enhancing employer reputation and attracting talent.
  1. Company Registration Certificate: Certificate of Incorporation or Partnership Deed (for partnerships).
  2. PAN Card of Business: PAN card of the business entity.
  3. Proof of Business Address: Utility bill, rent agreement, or sales deed.
  4. Bank Details: Bank statement and cancelled cheque of the business entity.
  5. Details of Directors/Partners/Proprietors: Personal details, ID and address proofs (such as Aadhaar, PAN, passport) of the principal employer and directors/partners.
  6. Employee Details: Number of employees and their details, including date of joining, salary, and ID proofs.
  7. Digital Signature Certificate (DSC): DSC of the employer or authorized signatory for online verification.
  1. Monthly Contribution Deposit: Employers must deposit both the employer and employee EPF contributions (12% each of the employee’s basic salary) by the 15th of the following month.
  2. EPF Monthly Return: File EPF returns each month through the Electronic Challan cum Return (ECR) on the EPFO portal. The return includes employee and employer contributions, employee details, and salary information.
  3. Annual Return Filing: Employers need to file an annual return in Form 6A, which provides details of employee contributions and accounts.
  4. Updating Employee Information: Maintain accurate records of employee details, including salary changes, joining/leaving dates, and other employment changes.
  5. Provide EPF Statements: Issue annual EPF account statements to employees, showing contributions and interest credited.
  6. Compliance with EDLI Scheme: The EPF registration includes compliance with the Employees’ Deposit Linked Insurance Scheme (EDLI), which provides life insurance benefits to employees.
  7. Employee Exit Formalities: Employers must update the EPFO portal regarding employees who leave the organization to facilitate their EPF withdrawals or transfer processes.

Penalties for Non-Compliance

  1. Late Payment Interest: An interest rate of 12% per annum is charged for delayed EPF contributions.
  2. Damages for Non-Compliance: Penalty for non-compliance ranges from 5% to 25% of the unpaid dues, depending on the period of delay.
  3. Legal Consequences: Persistent non-compliance can lead to prosecution under the EPF Act, including fines and imprisonment.
  4. Audit and Inspections: The EPFO can inspect records and initiate action if irregularities are found in compliance with EPF contributions and filings.

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