Overview of EPF Registration in India

Registering for the Employees' Provident Fund offers several benefits to employees. Following are the advantages:

• Retirement Savings: EPF registration enables individuals to accumulate a substantial retirement corpus over their working years. Regular contributions from both the employee and employer, along with the interest earned, help build a long-term savings pool.
• Financial Security: EPF provides financial security post-employment, ensuring individuals have a stable income source during their retirement phase when regular earnings cease.
• Tax Benefits: Contributions made to EPF are eligible for tax deductions under specific tax laws. This allows individuals to reduce their taxable income and potentially lower their overall tax liability.
• Interest on Savings: The EPF contributions earn a competitive rate of interest, which helps grow the savings over time. The accumulated interest adds to the final corpus, enhancing the overall retirement benefits.
• Loan Facilities: EPF registration allows members to avail themselves of certain loan facilities against their EPF balance for various purposes such as housing, education or medical emergencies.
• Social Security: EPF serves as a social security measure, providing a safety net for employees. It ensures a sense of financial stability and protects against unforeseen circumstances such as disability or sudden financial crises.
• Nomination Facility: EPF registration allows individuals to nominate their dependents, ensuring that in the event of their demise, the accumulated funds are transferred to the nominated beneficiaries smoothly.
• Easy Transfer of Funds: EPF membership can be transferred easily when switching jobs, allowing individuals to carry forward their accumulated savings and continue contributing to their retirement fund seamlessly.
• Provident Fund Withdrawal: In certain situations, such as education or medical emergencies, members can withdraw a portion of their EPF savings to meet urgent financial requirements.
• Financial Discipline: By participating in EPF, employees cultivate a habit of regular savings, promoting financial discipline and planning for their future needs.

Importance of EPF Registration

It is important to go through the process of EPF registration for the following factors given below:

1. Deduction of TDS from employees' salaries requires EPF registration.

2. Processing of remittances is only possible after generating challans through the EPFO employer portal.

3. Risk coverage:

• EPF provides coverage for risks associated with retirement, illness, or death of employees and their dependents.

4. Uniform account:

• EPF accounts are consistent and transferable to any other place of employment.

5. Employee Deposit Linked Insurance Scheme (EDLIS):

• All PF account holders are eligible for the EDLIS, which deducts life insurance premium at a rate of 0.5% of the salary.

6. Long-term goals:

• Accumulated PF amount can be useful for fulfilling future goals, like higher education or marriage.

7. Emergency needs:

• PF amount can provide immediate financial assistance for unforeseen events like family gatherings, mishaps, or illnesses.

What are the Eligibility Criteria for EPF in India?

The eligibility criteria for EPF are as follows:

• Mandatory Registration: Establishments with a workforce exceeding 20 employees must register under the EPFO in accordance with the prescribed guidelines.
• Optional Registration: Organisations with less than 20 employees have the choice to voluntarily register for EPF, even though it is not mandatory for them.
• All Recognised Establishments: Any type of establishment that meets the criteria outlined in the EPF Act must register with the Employee Provident Fund. This applies to all recognised establishments, regardless of their size or nature of operation.

For registering with EPF, the following documents are must:

• Proof of PAN (Permanent Account Number) or CoI (Certificate of Incorporation).
• Address verification for the establishment premises.
• Identification and address verification for Directors/Partners/Proprietor.
• Details of residents and all members, including their addresses and contact information in the case of societies or trusts.
• Partnership Deed/LLP Agreement/Memorandum of Association (MOA) and Articles of Association (AOA).
• Employee details, including nominee information and salary details.
• Cancelled bank account cheque.

For individual identity proof:

• Passport
• Aadhar card
• Voter ID
• Driving license

For individual address proof:

• Self-attested copy of a recent telephone/mobile or electricity bill
• Bank account statement (less than 2 months old)

For proprietorship/partnership/LLP/company address proof:

• Telephone/mobile/electricity/gas bill (less than 2 months old)
• In the case of rented premises, a notarised copy of the rent agreement along with a No-Objection Certificate (NOC) for conducting business.
• In the case of self-owned premises, the registered title document.

What is the Rate of Contribution under EPF?

The contribution rate for EPF varies based on the number of employees in an establishment:

For establishments hiring 20 or more employees:

• The employer as well as the employee are required to contribute up to 12% of the employee's salary, which includes basic wages and dearness allowances.

For establishments hiring less than 20 employees:

• Certain establishments contribute at a rate of 10% of the employee's basic wages instead of 12%.

• This includes establishments that have up to 10 employees and have voluntary registration under EPFO, or have incurred losses during the previous year, or belong to specific sectors such as beedi-making factories, etc.

What are the EPF Charges?

The charges associated with EPF are as given below:

• Employee Share, Pension Contribution and EDLI Contribution: The contribution amount for each employee is rounded to the nearest rupee. This includes the employee's share, the contribution towards the pension scheme and the EDLI (Employee Deposit Linked Insurance) contribution.
• Employer’s Share: The difference between the employee's share and the pension contribution makes up for the share of the employer.
• EPF Administrative Charges: The monthly payment amount for EPF administrative charges is rounded to the nearest rupee, with a minimum payment of Rs.500 required. However, if there are no members in the establishment for a particular month, the minimum administrative charges applicable are Rs.75.
• EDLI Administrative Charges: Similarly, the monthly payment amount for EDLI administrative charges is rounded to the nearest rupee, with a minimum payment of Rs.200. If there are no members in the establishment for that month, the minimum payable administrative charge is Rs.25.
• Exemption Cases: In cases where the establishment is exempted from the PF (Provident Fund) scheme, inspection charges of 0.18% (with a minimum of Rs.5) are payable instead of the administrative charges.
• EDLI Exemption: If the establishment is exempted under the EDLI scheme, inspection charges of a minimum of Rs.1 at the rate of 0.005% are payable in place of the administrative charges.

For registering with EPFO in India, the following steps must be followed:

Step 1: Access the EPFO Website and find the "Establishment Registration" button on the homepage.

Step 2: Click the "Establishment Registration" button which will redirect you to the sign-up page of the Unified Shram Suvidha Portal (USSP). Here, find the "Sign Up" button and go on to provide the details asked there. Then, click "Sign Up" to create your account.

Step 3: After the USSP account is successfully created, log in and select the "Registration For EPFO-ESIC" button on the screen.

Choose the "Apply for New Registration" button, wherein 2 options will be presented: "Employees' State Insurance Act, 1948" and "Employees' Provident Fund and Miscellaneous Provision Act, 1952." Now, select "Employees' Provident Fund and Miscellaneous Provision Act, 1952" and click "Submit."

Step 4: Complete the Registration Form.

Upon submitting, you will be taken to the "Registration Form for EPFO" page. Fill in all sections of the form accurately. Here, review the form in a summary and click "Submit" after ensuring that the provided details are correct.

Step 5: As a final step, attach your Digital Signature.

On the next page, click the button mentioning "Digital Signature" and attach the Digital Signature Certificate (DSC). A successful completion message for the registration form will be displayed once the employer's DSC is uploaded.

Finally, an email confirming the EPFO registration completion will also be sent to the employer from the Unified Shram Suvidha Platform.

After the establishment is registered with EPFO, it must adhere to specific compulsory requirements on a monthly or annual basis as specified by the act:

• Monthly filing of returns is done online through the establishment's login by uploading the ECR (Electronic Challan-cum-Return) sheet.
• The return must be filed online by the 15th of the following month.
• The ECR sheet can be obtained from EPFO as an XML file, containing the names and UANs (Universal Account Numbers) of all employees registered with the establishment during the relevant month.
• The XML file needs to be converted into a CSV file format before uploading it for return filing.
• Complete the return filing process by making the necessary contributions through online payment gateways.

What are the Recent Changes Made to EPF Registration?

Recent developments regarding the Employee Provident Fund that must be noted are:

• Expanding Employee Definition: The Social Security Code, 2020 introduced amendments to broaden the scope of employees eligible for EPF benefits. The revised definition now encompasses various types of employees, including freelancers and other categories.
• If the employer fails to deposit the employee's PF contribution after deducting it, the employer will not be eligible for claiming it as a deduction.
• Revised Interest Rate: Though the EPF interest rate has been adjusted many times, for the fiscal year 2022-23, the EPF contributions will accrue an interest rate of 8.1%.

The Provident Fund is primarily a government mandated employee benefit program designed to offer various facilities to employees within an organisation. These facilities include retirement benefits, medical assistance, support for children's education, insurance coverage as well as housing provisions. The main objective lies in ensuring the financial security and stability of employees, providing them with a sense of assurance for their future well-being.

Startupfino is a company that specialises in offering complete services for EPF registration and compliance. We can help you with everything from providing advice in the initial phase to ensuring that you meet all the necessary requirements and fulfil all post registration compliances.

Our EPF services include the following:

• Simplify EPF registration with our comprehensive services, handling all documentation and requirements efficiently.
• Get expert guidance to accurately fill out EPF registration forms and streamline the process effortlessly.
• We specialise in simplifying EPF contribution calculations and payment procedures, ensuring compliance and ease of use.
• File your monthly EPF returns seamlessly online with our services, meeting all deadlines effortlessly.
• Benefit from our dedicated support team, ready to address any EPF registration and compliance queries you may have.

By availing our services, entrepreneurs can avoid the negative outcomes of non-followance of rules and compliances. StartupFino works hard to provide services that are prompt and effective, so you can manage your business without any issues and without facing penalties or problems.