NEW DELHI :
Don’t be shocked for those who see that there was no deposit in your staff provident fund (EPF) account to date within the new monetary year. With extreme disruptions in money flows during the lockdown that started on March 25 and has been prolonged for the fourth consecutive time until May 31, the Employees’ Provident Fund Organisation (EPFO) has allowed employers to delay deposits in EPF accounts.
Under the EPFO guidelines, employers are mandated to deposit provident fund dues on salaries by 15th of the subsequent month. After a grace interval of 10 days, employers are penalised for any delay. So for instance, EPF dues in your March month’s wage ought to be deposited by your employer inside 25th April to keep away from any penalty.
Keeping the monetary stress because of the lockdown in thoughts, the retirement funds physique has issued a notification saying that no penalty will be charged for any delay in such deposits for your entire interval of lockdown.
“Considering the difficulty faced by the establishments in timely deposit of contributions during the period of lockdown due to operational and economic reasons, it is evident that such delays are without mens rea (intention) of the employer,” the EPFO stated in a notification this month.
There are round 6.5 lakhs EPF coated institutions in India. Many employers are more likely to avail the advantage of delayed deposits. The transfer could have an effect on staff in two methods.
1) If you might be planning to make a withdrawal out of your EPF account anytime quickly, the steadiness in your account won’t embrace newest accruals because of a delay in deposits. For instance, if you’re planning to make a Covid pandemic withdrawal, your eligibility quantity depends in your EPF account steadiness on the time of constructing withdrawal.
Under the Covid withdrawal rule, you possibly can withdraw the much less of the 2 quantities: your primary wage and dearness allowances (DA) for 3 months or as much as 75% of the quantity standing to member’s credit score within the EPF account.
2) Any delay made by employers in EPF deposits may also have an effect on your curiosity revenue. “The interest on PF contribution is calculated on the balance accumulated at the beginning of each month for each employee. The same shall be credited by April after the end of the financial year. With delayed payments and lower contribution (10% instead of 12%) employees are likely to accumulate lower interest,” Archit Gupta, Founder and CEO, Cleartax, advised Livemint.
Interest charges for EPF have additionally dropped resulting in additional fall in curiosity accumulation for the EPF steadiness.