It will now be very damaging for companies not to submit their contribution to the provident fund of employees in time. Now institutions will not be able to claim tax deduction in their income. In such a situation, institutions and companies will have to deposit money in their employee’s PM account on time. At the same time, the employee will not lose interest on the amount received. This proposal has been presented by Finance Minister Nirmala Sitharaman in Budget 2021. At present, an organized sector employee pays 12 per cent of his basic salary as compulsory Employees Provident Fund (EPF) every month and a matching amount is contributed by the employer. Out of the employer’s contribution, 8.33 percent goes towards pension contribution, but this amount is ₹ 1,250 per month. The remaining 3.67 percent goes to provident fund. While EPFO receives an EPS contribution of approximately ₹ 36,000 crore per year from over 60 million subscribers, 2. There are more than 3 million pensioners, who get a pension of ₹ 1,000 every month. However, his contribution to PF is less than a quarter of it.
How does the interest calculation on EPF deposit happen?
The EPF scheme for April 2020 was to be submitted to companies by 15 May 2020. Once the money was deposited, interest started from June 1, 2020. Explain that the rule is different for delay in submission of contribution and non submission. If the company is late in depositing the money, the employees will get interest from June 1. If you do not deposit money due to financial problem, then you get any interest.
PF interest will be taxed
It is worth noting that in the budget this year, it has been proposed that if the interest received on PF exceeds Rs 2.5 lakh, then it will come under the tax net. Earlier, there is no tax on the interest received on the money deposited in the PF account. Due to which the big earners accumulate large amounts of money. Due to which they used to get tax exemption and good interest till now.
EPFO takes major action, sees bank accounts of 30 establishments who do not deposit contributions
30 establishments which have not deposited contributions to the employees’ provident fund accounts have come under the target of the Employees Provident Fund Organization. A recovery notice of Rs seven crore has been issued to the Indian Turpentine Resins (ITR) factory which has been closed for 15 years. The notice has also been issued to the liquidator posted from the Bombay High Court of Fatehganj Western’s Synthetic and Chemical Limited. The Basic Education Officer of Moradabad has also been issued a recovery notice. The Employees Provident Fund Organization monitors the amount deposited in the Provident Fund of employees working in private and government offices in Bareilly and Moradabad. After the Kovid period, once again the department has speeded up the recovery. Establishments are being asked to deposit money in the accounts of employees on time. At the same time, the original outstanding of the ITR factory is about 2. 77 crores. From 1976 to October 2004 nearly seven crores have been reached with outstanding interest. The notice has been sent to the office of Commissioner of Bareilly, Ranvir Prasad. According to Ankur Gupta, Commissioner of the Employees Provident Fund Organization, notices are issued to private and government institutions for not depositing timely contributions to the accounts of employees. The accounts are seized and send arrest warrants.
Supreme court decides to reconsider 2019 order on employee pension
The Supreme Court now allowed review petitions filed by the Employees Provident Fund Organization (EPFO) and decided to reconsider the previous order, which allowed pay in proportion to the provident fund pension. The Supreme Court has withdrawn its 2019 order which paved the way for higher pension for employees by removing the current wage ceiling of ceiling 15,000. An SC bench headed by Justice Udaya U. Lalit allowed review petitions filed by the Employees Provident Fund Organization (EPFO) and decided to reconsider the previous order, Which allowed salary in proportion to the provident fund pension. The bench jointly heard the review petition of EPFO and the appeal filed by the central government on Friday last week. The court order was issued a day earlier. Starting on February 25, the bench will now re-examine the 2018 High Court judgment which asked the organization to pay full pension to retired employees on the basis of their total salary instead of paying the amount, But a pensioner’s contribution is calculated, with the maximum being 15,000 per month.
Supreme Court rejected EPFO’s appeal
On 1 April 2019, by a brief order, the Supreme Court dismissed EPFO’s appeal against the Kerala HC ruling, forcing the retirement fund body to file a review petition. At the same time, the Union Labor Ministry also decided to file a separate appeal against the HC decision to highlight that such an order would make the organization financially inseparable as there would be a shortfall of several thousand crores every year. The Kerala HC verdict was not implemented, citing the pendency of the case in the Supreme Court while the Labor Ministry appealed to stay the HC verdict.
