When is provident fund payable?

Asked by: Dr. Zoie Brekke PhD
Score: 4.8/5 (58 votes)

EPF is deducted from every employee's salary, and the payment due date is by 15th of the following month. For instance, if you want to deposit the EPF contribution for May, then as an employer you should clear all the payments before the 15th of June.

View full answer

Just so, What is the due date for payment of PF?

Provident Fund (PF) payments are due on the 15th of each month. The employer must deposit a total of 12% or 10% of the employee wages towards PF on or before this date every month.

Just so, What is provident fund payable?. A provident fund is a compulsory, government-managed retirement savings scheme used in Singapore, India, and other developing countries. Both the employee and employer contribute to a fund that aims to provide financial support to the employee when they reach retirement.

In this manner, Is PF mandatory for salary above 15000?

EPF eligibility criteria

If you are drawing a salary higher than Rs. 15,000 per month, you are termed a non-eligible employee and it is not mandatory for you to become a member of the EPF, although you can still register with the consent of your employer and approval from the Assistant PF Commissioner.

What is provident fund and how it works?

An Employee Provident Fund is a scheme that has been put in place for all salaried employees working in a corporate organization with 20 or more employees. The Employee Provident Fund Organization of India or EPFO has instructed all organizations to put a fraction of employees' salaries into the provident fund.

45 related questions found

How is a provident fund calculated?

The employee contributes 12 percent of his or her basic salary along with the Dearness Allowance every month to the EPF account. For example: If the basic salary is Rs. 15,000 per month, the employee contribution shall be 12 % of 15000, which comes to Rs 1800/-. This amount is the employee contribution.

Who is eligible for PF?

Employees drawing less than Rs 15,000 per month have to mandatorily become members of the EPF. However, an employee who is drawing 'pay' above prescribed limit (currently Rs 15,000) can become a member with permission of Assistant PF Commissioner, if he and his employer agree.

Why PF is cut from salary?

The PF scheme is managed under the Employees' Provident Fund Organisation. Under this scheme, an employee has to pay a certain amount of sum from their salary towards the scheme. The employer makes an equal contribution to the scheme and the employee can avail the lump sum amount with interest on retirement.

What is the salary limit for PF 2021?

The government has raised the threshold limit of tax-exempt contributions to the Provident Fund (PF) to Rs 5 lakh (from Rs 2.5 lakh announced in Budget 2021), subject to certain conditions. This increased tax-exempt limit is applicable to only those PF contributions where there is no employer contribution.

How much PF is cut from salary?

You and your employer need to transfer 10% or 12% of your basic salary to contribute towards EPF. However, if you are a woman, you only need to contribute 8% of your basic salary for the first three years. During this period, your employer's EPF contribution will remain 12%.

Can I get my provident fund if I resign?

If you resign, or you are retrenched, you are allowed to withdraw from your employer-sponsored retirement fund (that is a pension or provident fund). The "benefit" you can claim is the balance in your retirement account. Once you have withdrawn, you have no other claim against that fund.

How many types of provident fund are there?

Employees' provident fund is classified into 4 categories: Statutory Provident Fund, Recognized Provident Fund, Unrecognized Provident Fund and Public Provident Fund. Let us have a brief look on the types of funds and tax imposed on these funds.

Does Provident Fund get taxed?

The first R25 000 of your provident fund withdrawal is not taxed, so if this is your first (retirement fund) withdrawal you will pay no tax, If it is your second, you would most likely pay tax at 18%.

What is the due date for PF payment for April 2020?

The EPFO vide notification dated 15th April 2020 had extended the due date for payment of contributions and administrative charges/Inspection charges due for the wage month of March 2020 from 15th April 2020 to 15th May 2020.

What is the penalty for EPF late payment?

An employer who fails to pay the contribution within the limit specified in the regulation shall be liable to pay simple interest at the rate of 12% per annum in respect of each day of delay or default in payment of contribution.

What is PF return monthly?

Provident fund is a social security system that was introduced for the purpose of encouraging savings among employees, so as to benefit them during the course of their retirement. All employers having PF registration are responsible to file returns on a monthly basis. ...

What is the new rules for PF?

The rule requires all PF accounts to be split into separate accounts – one with the taxable contribution and interest earned on that component, and another with the non-taxable contribution that shall include the closing balance of the PF account as on March 31, 2021 and all fresh non-taxable contributions and interest ...

Can we contribute more than 12% in EPF?

This contribution is beyond the 12% of contribution by an employee towards his EPF. The maximum contribution is up to 100% of his Basic Salary and Dearness Allowance. Interest is earned at the same rate as the EPF. Employers are under no obligation to contribute to their employees' VPF portfolio.

What is CTC salary?

Cost to Company or CTC as it is commonly called, is the cost a company incurs when hiring an employee. CTC involves a number of other elements and is cumulative of House Rent Allowance (HRA), Provident Fund (PF), and Medical Insurance among other allowances which are added to the basic salary.

Is PF cut from basic salary?

Based on Basic salary: Generally, 12 per cent of Basic Salary goes into the PF account each month. So, if your monthly Basic Salary is Rs nearly 1.75 lakh ( just the basic salary and not your total monthly income), your monthly contribution is nearly Rs 20833, which is Rs 2.5 lakh in a year.

Is PF part of CTC?

Employer PF is part of CTC not shown on Salary Slip. It is NOT counted as part of your earnings and hence not taxed.

Is it compulsory to deduct PF from salary?

If your starting salary is above 25000 Rs then it is not mandatory to deduct PF. But if you are already a member of EPF and your monthly salary increases to above 25000 Rs then you have to continue your PF contribution, but PF will be calculated on a limit 0f 15000 salary only.

What is gratuity salary?

Gratuity is the monetary amount which is payable to the employee of an organisation under the Payment of Gratuity Act 1972. ... It is generally a token amount paid by the company showing gratitude towards the employee for their services towards the organisation.

What is the rule of EPF withdrawal?

According to the new rules, PF account holders can withdraw money equivalent to three months of their basic salary plus dearness allowance or 75% of the net balance in their PF or EPF account, whichever is lower. This will be taken as a non-refundable deposit. These withdrawal claims can be raised online.