THE EMPLOYEES’ PROVIDENT FUND SCHEME, 1952

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THE EMPLOYEES’ PROVIDENT FUND SCHEME, 1952

(Framed under section 5 of the Employees’ Provident Funds Act, 1952)

CHAPTER V

CONTRIBUTIONS

  1. Contribution.—(1) The contributions payable by the employer under the Scheme shall be at the rate of 8-1/3 per cent of the basic wages, dearness allowance (including the cash value of any food concession and retaining allowance (if any) payable to each employee to whom the Scheme applies:

Provided that the above rate of contribution shall be ten per cent in respect of any establishment or class of establishments which the Central Government may specify in the Official Gazette from time to time under the first proviso to sub-section (1) of section 6 of the Act.

(2) The contribution payable by the employee under the Scheme shall be equal to the contribution payable by the employer in respect of such employee :

Provided that in respect of any employee to whom the Scheme applies, the contribution payable by him may, if he so desires, be an amount exceeding eight and one-third per cent or ten per cent, as the case may be, of his basic wages, dearness allowance and retaining allowance (if any) subject to the condition that the employee shall not be under an obligation to pay any contribution over and above his contribution payable under the Act.

(3) The contributions shall be calculated on the basis of basic wages, dearness allowance (including the cash value of any food concession) and retaining allowance (if any) actually drawn during the whole month whether paid on daily weekly, fortnightly or monthly basis.

(4) Each contribution shall be calculated to the nearest rupee, 50 paise or more to be counted as the net higher rupee and fraction of a rupee less than 50 paise to be ignored.

  1. Payment of contributions.—(1) The employer shall, in the first instance, pay both the contribution payable by himself (in this Scheme referred to as the employer’s contribution) and also, on behalf of the member employed by him directly or by or through a contractor, the contribution payable by such member (in this Scheme referred to as the member’s contribution).

(2) In respect of employees employed by or through a contractor, the contractor shall recover the contribution payable by such employee (in this Scheme referred to as the member’s contribution) and shall pay to the principal employer the amount of member’s contribution so deducted together with an equal amount of contribution (in this Scheme referred to as the employer’s contribution) and also administrative charges.

(3) It shall be the responsibility of the principal employer to pay both the contribution payable by himself in respect of the employees directly employed by him and also in respect of the employees employed by or through a contractor and also administrative charges.

Explanation : For the purposes of this paragraph the expression “administrative charges” means such percentage of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee, as the Central Government may, in consultation with the Central Board and having regard to the resources of the Fund for meeting its normal administrative expenses, fix.

  1. Employer’s share not to be deducted from the members.—Notwithstanding any contract to the contrary the employer shall not be entitled to deduct the employer’s contribution from the wage of a member or otherwise to recover it from him.
  2. Recovery of a member’s share of contribution.—(1) The amount of a member’s contribution paid by the employer (or a contractor) shall, notwithstanding the provisions in this Scheme or any law for the time being in force or any contract to the contrary, be recoverable by means of deduction from the wages of the member and not otherwise:

Provided that no such deduction may be made from any wages other than that which is paid in respect of the period or part of the period in respect of which the contribution is payable :

Provided further that the employer or a contractor shall be entitled to recover the employee’s share from a wage other than that which is paid in respect of the period for which the contribution has been paid or is payable where the employee has in writing given a false declaration at the time of joining service with the said employer or a contractor that he was not already a member of the Fund:

Provided further that where no such deduction has been made on account of an accidental mistake or a clerical error, such deduction may, with the consent in writing of the Inspector, be made from the subsequent wages.

(2) Deduction made from the wages of a member paid on daily, weekly or fortnightly basis should be totalled up to indicate the monthly deductions.

(3) Any sum deducted by an employer or the contractor from the wages of an employee under this Scheme shall be deemed to have been entrusted to him for the purpose of paying the contribution in respect of which it was deducted.

32A. Recovery of damages for default in payment of any contribution.—(1) Where an employer makes default in the payment of any contribution to the fund, or in the transfer of accumulations required to be transferred by him under sub-section (2) of section 15 or sub-section (5) of section 17 of the Act or in the payment of any charges payable under any other provisions of the Act or Scheme or under any of the conditions specified under section 17 of the Act, the Central Provident Fund Commissioner or such officer as may be authorised by the Central Government, by notification in the Official Gazette in this behalf, may recover from the employer by way of penalty, damages at the rates given below:

Period of default Rate of damages
(% of arrears per annum)
(1) Less than two months 17
(b) Two months and above but less than four months 22
(c) Four months and above but less than six months 27
(d) Six months and above 37

(2) The damages shall be calculated to the nearest rupee, 50 paise or more to be counted as the nearest higher rupee and fraction of a rupee less tan 50 paise to be ignored.

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CHAPTER VI

DECLARATION, CONTRIBUTION CARDS AND RETURNS

* * * *

  1. Mode of payment of contributions.—(1) The employer shall, before paying the member his wages in respect of any period or part of period for which contributions are payable, deduct the employee’s contribution from his wages which together with his own contribution as well as an administrative charge of such percentage of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon) for the time being payable to the employees other than an excluded employee, as the Central Government may fix. He shall within fifteen days of the close of every month pay the same to the Fund by separate bank drafts or cheques on account of contributions and administrative charges:

Provided that if payment is made by a cheque, it should be drawn only on the local bank of the place in which deposits are made:

Provided further that where there is no branch of the Reserve Bank or the State Bank of India at the station where the factory or other establishment is situated, the employer shall pay to the Fund the amount mentioned above by means of Reserve Bank of India Government Drafts at par separately on account of contributions and administrative charge.

(2) The employer shall forward to the Commissioner, within twenty-five days of the close of the month, a monthly consolidated statement, in such form as the Commissioner may specify, showing recoveries made from the wages of each employee and the amount contributed by the employer in respect of such employee :

Provided that an employer shall send a ‘NIL’ return, if no such recoveries have been made from the employees:

Provided that in the case of any such employee who has become a member of the Family Pension Fund under the Employees’ Family Pension Scheme, 1971, the aforesaid Form shall also contain such particulars as are necessary to comply with the requirements of that Scheme.

(3) Notwithstanding anything contained in sub-paragraph (2), in respect of such establishments as are notified by the Commissioner to be annually posted establishments, the employer shall forward to the Commissioner within twenty-five days of the close of each month, a monthly abstract in such form as the Commissioner may specify, showing, inter alia,the aggregate amount of recoveries made from the wages of all the members and the aggregate amount contributed by the employer in respect of all such members for the month. The employer shall also send to the Commissioner, within one month of the close of the period of currency, a Consolidated Annual Contribution Statement in Form 6A, showing the total amount of recoveries made during the period of currency from the wages of each member and the total amount contributed by the employer in respect of each such member for the said period. The employer shall maintain on his record duplicate copies of the aforesaid monthly abstract and Consolidated Annual Contribution Statement for production at the time of inspection by an Inspector.

[The Scheme is relevant in the context of section 2(38) of the IT Act, 1961]

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