Payment & Filing Due Dates For PF and Calculation of Penalty
Provident Fund (PF) Due Date
Provident Fund (PF) is a periodic contribution by both the employer and the employee towards a common fund, to ensure that the employee is financially secure during the course of his retirement. Provident Fund is applicable for all employers in India having more than 20 employees. In this article, we look at some of the important Provident Fund payment & filing due dates applicable for an employer in India.
PF return due date:
With the new ECR in place, filing and payment can be both done at the same time. Hence, the PF return due date is the same as that of payment. I.e., on or before 15th of every month.
|Sl No.||TYPE||DUE DATE|
|1||PF payment||On or before 15th of every month|
|2||ECR filing||On or before 15th of every month|
|3||PF annual return||25th April of every year|
PF payment due date:
This is the date by which you have to submit the PF which you will deduct from your employees’ salary. This has to be done on or before 15th of next month. i.e., if you want to deposit PF contribution for the month of June, then it has to be done on or before 15th of July.
Also Read: PF Admin Charges – A Detailed Explanation
The employer must deposit a total of 12% or 10% of the employee wages towards PF on or before this date every month. For most entities, the PF rate of 12% would be applicable. The 10% PF rate is applicable for:
a. Any establishment in which less than 20 employees are employed.
b. Any sick industrial company and which has been declared as such by the Board for Industrial and Financial Reconstruction
c. Any establishment which has at the end of any financial year, accumulated losses equal to or exceeding its entire net worth and
d. Any establishment in following industries:-
v. Guar gum Factories.
The contributions are payable on maximum wage ceiling of Rs 15000/- by employee and employer. However, an employee can pay at a higher rate and in such case employer is not under any obligation to pay at such higher rate.
Withdrawal of Grace Period for PF Deposit
Earlier, a grace period of five days was allowed to the employers to remit the PF deposit, thereby affording the employer a 20 period window in a given month. This can be attributed to the manual calculation of remuneration and dues, which was time-consuming. Such a delay is now being avoided, thanks to the electronic computation of wages and EPF liabilities. Moreover, the contributions are now deposited through internet banking. Taking this into perspective, the EPFO decided to withdraw the grace period that was previously afforded to the employers. Hence, the employers must deposit their contributions by the 15th of every month.
PF Due Date Falling on Public Holiday/Sunday
Previously, when grace period was allowed, employers were levied with penal damages for payments deposited by them after the due date, even if the particular due date was a public/bank holiday. After EPFO’s recent update on due date, remittances made under such circumstances will be treated as a normal payment, and will not incur penal damages.
Penalty for Delayed Payment
An employer who does not pay the contribution within the time limit shall be liable to pay a simple interest at the rate of 12% per annum for each day of the default or delay in payment of contribution.
Delayed remittance of PF deposit will incur penal damages. The charges as specified by the EPFO, are as follows:
|SL. No.||NO OF MONTHS DELAYED||Rate of Penalty|
|1||Delay for up to 2 months||5% per annum|
|2||Delay ranging from 2 months to 4 months||10% per annum|
|3||Delay ranging from 4 months to 6 months||15% per annum|
|4||Delay exceeding 6 months|| 25% per annum (It may correspondingly go up to 100%) |
Damages cannot be levied at a lesser rate than what is specified. However, exceptions in terms of reductions or waiver of damages can be extended to sick industrial companies having rehabilitation scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR).
The date of debit from the employers account may be considered as the date of payment of penal damages. Occurance of delay due to delayed credit in EPFO’s accounts or delayed transacting by the banks will be dealt with in accordance with the banking agreement with the various banks.
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