26561632 Presentation on PF Misc Provision Acts 1952

8/9/2019 26561632 Presentation on PF Misc Provision Acts 1952

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PRESENTATIONPRESENTATIONONONPROVIDENT FUND &PROVIDENT FUND &

MISCELLANEOUSMISCELLANEOUSPROVISIONS ACT, 1952PROVISIONS ACT, 1952


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INTRODUCTIONINTRODUCTION

Definition of PFDefinition of PF ::--

PF is that fund that fund which is deducted from thePF is that fund that fund which is deducted from thesalary of an employee at a definite rate.salary of an employee at a definite rate.


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H ISTORY OF T H E ACTH ISTORY OF T H E ACTThe Employees Provident Funds Ordinance, 1951 wasThe Employees Provident Funds Ordinance, 1951 waspromulgated by the President of India under thepromulgated by the President of India under theconstitution in November, 1951. A scheme under the Act constitution in November, 1951. A scheme under the Act was framed by the Central Government inwas framed by the Central Government inSeptember1951In exercise of the powers conferred bySeptember1951In exercise of the powers conferred bySection 6Section 6--A of the Employees Provident Fund Act,1952 A of the Employees Provident Fund Act,1952,the Central Government has maid Employees Family,the Central Government has maid Employees FamilyPension Scheme in 1972. It may be further observedPension Scheme in 1972. It may be further observedthat in exercise of powers conferred by Section 6that in exercise of powers conferred by Section 6- -C of C of

the Employees Provident Fund Act, 1952, the Centralthe Employees Provident Fund Act, 1952, the CentralGovernment has made Employees Deposit Government has made Employees Deposit linkedlinkedInsurance Scheme in 1976.Insurance Scheme in 1976.


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PF

GPF CPF EPF

TYPES OF PFTYPES OF PF


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PROVIDENT FUND ACT 1952PROVIDENT FUND ACT 1952PFPF ActAct isis anan importantimportant labor labor legislationlegislation whichwhich camecame intointoexistenceexistence inin 19521952 toto ensureensure compulsorycompulsory PF,PF, familyfamily pension pensionfundfund andand depositdeposit linkedlinked insuranceinsurance inin factoriesfactories andand other other establishmentestablishment for for thethe benefits benefits of of employeesemployees. .TheThe legislationlegislation of of PFPF inin industrialindustrial andand under under takentaken waswasdiscusseddiscussed inin whichwhich representativerepresentative of of centralcentral andand statestate GovtGovt..,,employer employer andand worker worker participated participated. .


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SCOPESCOPEThe provision of the act extend to whole of India except The provision of the act extend to whole of India except

the State of Jammu and Kashmir. Section 1 (3) of thethe State of Jammu and Kashmir. Section 1 (3) of the Act provides that subject to provisions contained in Act provides that subject to provisions contained insection 16 the provisions of the Act apply tosection 16 the provisions of the Act apply to- -

(a) to every establishment which is a factory engaged in(a) to every establishment which is a factory engaged inany industry specified in schedule I and in which twentyany industry specified in schedule I and in which twentyor more persons are employed.or more persons are employed.

(b) to any other establishment employing twenty or more(b) to any other establishment employing twenty or morepersons or, class of such establishments which thepersons or, class of such establishments which thecentral Government may by notification in the officialcentral Government may by notification in the officialGazette.Gazette.


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POWER TO EXEMPTPOWER TO EXEMPT

The Factory/ Establishment in which the employees areThe Factory/ Establishment in which the employees arein the enjoyment of the benefits in the nature of thein the enjoyment of the benefits in the nature of theProvident fund, Pension which in the opinionProvident fund, Pension which in the opinionof the Govt. are not less favourable than the benefitsof the Govt. are not less favourable than the benefitsprovided under the Act.provided under the Act.

Such an exemption can be made only after consultationSuch an exemption can be made only after consultationwith Central board of Trustee.with Central board of Trustee.


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INSPECTORSINSPECTORS

Central and State govt. for appointing the inspector.Central and State govt. for appointing the inspector.

Duties :Duties :

Inquiring into correctness of information.Inquiring into correctness of information.Observance of the conditions of exemptions.Observance of the conditions of exemptions.Checking the books, registers and other documents.Checking the books, registers and other documents.Take extract from any book, register or document.Take extract from any book, register or document.

Power to search and seize the document under the codePower to search and seize the document under the codeof Criminal procedure. [sec.13]of Criminal procedure. [sec.13]


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DIFFERENT DEFINITIONSDIFFERENT DEFINITIONS

UNDER TH

IS ACTUNDER TH

IS ACTAppropriateAppropriate GovtGovt. . ::InIn relationrelation toto anan establishmentestablishment belonging belonging to,to, or or under under thethe controlcontrol of,of, thethe centralcentralGovtGovt.. or or inin relationsrelations toto anan establishmentestablishment connectedconnected withwith aa railwayrailway company,company, aa minemine

or or anan oiloil fieldfield or or inin relationrelation toto anan establishmentestablishment havinghaving departmentsdepartments or or branches branches ininmoremore thanthan oneone industryindustry. .

BasicBasic WagesWages : :It means all emoluments which are earned by an employee while on duty or onIt means all emoluments which are earned by an employee while on duty or onleave with wages in accordance with the terms of the contract of employment andleave with wages in accordance with the terms of the contract of employment andwhich are paid or payable in cash to him but does not include :which are paid or payable in cash to him but does not include :

i.i. AnyAny DADAii.ii. HRAHRAiii.iii. OAOAiv.iv. BonusBonusv.v. AnyAny other other


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DIFFERENT DEFINITIONSDIFFERENT DEFINITIONSUNDER T H IS ACTUNDER T H IS ACT

C ontribution :C ontribution :

A contribution payable in respect of a member under a scheme or the contributionA contribution payable in respect of a member under a scheme or the contribution

payable in respect of an employee to whom the insurance scheme applies. payable in respect of an employee to whom the insurance scheme applies.

Em ployee :Em ployee :

Exempted employeeExempted employee

F actory :F actory :

Any premises in any part of which a manufacturing process is being carried onAny premises in any part of which a manufacturing process is being carried onweather with the aid of power or with out the aid of power weather with the aid of power or with out the aid of power

E stablish m ent to include all depart m ents and branches :E stablish m ent to include all depart m ents and branches :

All the departments and branches are treated as a part of that establishment,All the departments and branches are treated as a part of that establishment,whether they are situated in the same place or any other place.whether they are situated in the same place or any other place.


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FRAMING OF T H E SC H EMESFRAMING OF T H E SC H EMESAND ESTABLIS H MENT OF T H EAND ESTABLIS H MENT OF T H E

FUNDSFUNDS

Employees provident funds scheme (sec5)Employees provident funds scheme (sec5)Employees deposit Employees deposit- - linked insurancelinked insurancescheme (sec6C)scheme (sec6C)

Employees pension scheme(sec6A)Employees pension scheme(sec6A)


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EMPLOYEES PROVIDENTEMPLOYEES PROVIDENT

FUNDS SC H EMEFUNDS SC H EMESchedule II of the act specifies in mattersSchedule II of the act specifies in matterswhich are to be included under this scheme.which are to be included under this scheme.These includeThese include- -

1.1. Time and manner of paying contributionTime and manner of paying contribution2.2. Payment of cost of administration by employerPayment of cost of administration by employer3.3. Conditions for withdrawals from the fundsConditions for withdrawals from the funds4.4. Rate of interest payableRate of interest payable5.5. Maintenance of records and registers etc.Maintenance of records and registers etc.


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CENTRAL BOARD OFCENTRAL BOARD OF

TRUSTEESTRUSTEESThe board consists of:The board consists of:- -

A chairman and a vice A chairman and a vice- -chairman appointed bychairman appointed bythe central govt.the central govt.

Not more than 5 central govt. officialsNot more than 5 central govt. officialsNot more than 15 representatives of the stateNot more than 15 representatives of the stategovt.govt.10 representatives of employers in consultation10 representatives of employers in consultationwith organisations of employerwith organisations of employer10 employees representatives in consultation10 employees representatives in consultationwith organisation of employees, all appointed bywith organisation of employees, all appointed bycentral govt.central govt.


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EXECUTIVE COMMITTEEEXECUTIVE COMMITTEE

A chairman from amongst the members of A chairman from amongst the members of the central boardthe central board2 officials members of the board2 officials members of the board3 representatives of the state govt.3 representatives of the state govt.3 representatives of the employers3 representatives of the employers3 representatives of employees (members3 representatives of employees (membersof central board)of central board)Central provident fund commissioners exCentral provident fund commissioners ex- -officio.officio.


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STATE BOARDSTATE BOARD

The central govt. is also empowered toThe central govt. is also empowered toconstitute state board of trustees as laidconstitute state board of trustees as laid

down in EPFS.down in EPFS.Powers & functions of state board arePowers & functions of state board areassigned by central govt.assigned by central govt.


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OFFICERSOFFICERS

Officers include central provident Officers include central provident commissioner who will be CEO of thecommissioner who will be CEO of the

central board of trusties, one financialcentral board of trusties, one financialadviser and chief a/c officer appointed byadviser and chief a/c officer appointed bycentral govt.central govt.


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CONTRIBUTIONCONTRIBUTION

It is payable by employer to the provident It is payable by employer to the provident fund will be 10 % of the basic wages.fund will be 10 % of the basic wages.

Govt. may raise contribution from 10% toGovt. may raise contribution from 10% to12%.12%.


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TERMS UNDER EPFS, 1952TERMS UNDER EPFS, 1952

Coverage:Coverage:- -i.i. Applicable to factories in about 180 Applicable to factories in about 180

industries of establishments employingindustries of establishments employing20 or more workers.20 or more workers.ii.ii. From 1 June 2001 wage ceiling has beenFrom 1 June 2001 wage ceiling has been

raised to Rs. 6,500.raised to Rs. 6,500.


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RATE OF INTERESTRATE OF INTEREST

Rate of interest on PF has been reducedRate of interest on PF has been reducedto 9.50% from 12% and is likely to beto 9.50% from 12% and is likely to bereduced further.reduced further.


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INVESTMENTINVESTMENT

PF contribution are invested as per thePF contribution are invested as per thepattern prescribed by the central govt.pattern prescribed by the central govt.


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WITH DRAWALWITH DRAWALCOMPLETE WITHDRAWL

Migrate from India to abroad for permanent settlement

Retrenched

Completes 15 years of members

Suffering from any severe disease

PARTIAL WITHDRAWAL

Construction of house

Illness

Marriage

Higher education of children

Payment of life insurance premium

Purchase of share


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EMPLOYEES DEPOSITEEMPLOYEES DEPOSITE- -LINKE DLINKE DINSUR ANCE SCHME,1976INSUR ANCE SCHME,1976

EMPLOYEES PENSION SCHEME EMPLOYEES PENSION SCHEME ,1995,1995


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W H AT IS IT?W H AT IS IT?

The central government is empowered toThe central government is empowered toframe the employees depositframe the employees deposit- -linked insurancelinked insurancescheme for the purpose of providing insurancescheme for the purpose of providing insurance

benefits to the covered under the act . benefits to the covered under the act .


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CONTRIBUTIONCONTRIBUTION

.05% of the employees wages..05% of the employees wages.Government contributes .25% of the employeesGovernment contributes .25% of the employeeswages bill.wages bill.


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BENE F ITSBENE F ITS

The person is entitled to receive his provident fundThe person is entitled to receive his provident fundaccumulations is to be paid an additional; amountaccumulations is to be paid an additional; amountequal to the average balance in the provident fundequal to the average balance in the provident fund

account of the deceased during the preceding 12account of the deceased during the preceding 12months, wherever the average provident fund balancemonths, wherever the average provident fund balanceis less than Rs 35,000is less than Rs 35,000

More than the 35,000 he will get 25% more.More than the 35,000 he will get 25% more.


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INVESTMENTINVESTMENT

The total of the contribution received to the insuranceThe total of the contribution received to the insurancefund was Rs 1301 Caror in 2000fund was Rs 1301 Caror in 20001441 caror in 20011441 caror in 2001

The progressive total of investment of fund was RsThe progressive total of investment of fund was Rs2466 caror in 20002466 caror in 2000

Rs 2783 caror in 2001Rs 2783 caror in 2001


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EMPLOYEES PENSION EMPLOYEES PENSION

SCHEME ,1995SCHEME ,1995Employees pension scheme aimed at providing for Employees pension scheme aimed at providing for economic sustence during old age and survivorshipeconomic sustence during old age and survivorshipcoverage to the member and his family.coverage to the member and his family.


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COVER AG ECOVER AG E

Employees pension scheme ,1995 is compulsory for Employees pension scheme ,1995 is compulsory for all person who were member of the family pensionall person who were member of the family pensionschme,1971schme,1971

For also those Employees provident fund fro 16For also those Employees provident fund fro 16 November 1995 that is the date of introduction of the November 1995 that is the date of introduction of thescheme.scheme.


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F IN ANCEF IN ANCE

Neither employee nor employer is required to make Neither employee nor employer is required to makeany additional contribution.any additional contribution.


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BENEFITSBENEFITS

M onthly m em ber s pension onM onthly m em ber s pension onsuperannuation/retire m ent and shortsuperannuation/retire m ent and short --services pension.services pension.

Members pension=Members pension=pensionable salary*(pensionable salary+2) pensionable salary*(pensionable salary+2)7070


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MONTHLY RE DUCE D PENSIONMONTHLY RE DUCE D PENSION

Date after 50 years of age but earlier than 58 years, inDate after 50 years of age but earlier than 58 years, inthis case amount of pension is reduced @ rate of 3%this case amount of pension is reduced @ rate of 3%every year the age falls short of 58 yearsevery year the age falls short of 58 years


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Permanent and total disablement planPermanent and total disablement planMonthly widow pensionMonthly widow pensionMonthly children pensionMonthly children pensionMonthly orphan pensionMonthly orphan pensionMonthly pension to permanently and totallyMonthly pension to permanently and totallyson or daughter son or daughter


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MISCELLANEOUS PROVISIONSMISCELLANEOUS PROVISIONSL ayingL aying of of thethe sche m esche m e P arlia m entP arlia m ent ::--AllAll thethe schemesschemes framedframed under under thethe actact areare toto be be laidlaid before before thethe parliament parliament whichwhich cancan modifymodify andand annualannual themthem.. [Sec[Sec.. 66D]D]

M odificationM odification of of thethe sche m esche m e [Sec[Sec.. 77]]

Deter m inationDeter m ination of of m oneysm oneys duedue fro mfro m em ployersem ployers: :[Sec[Sec77A ,A ,77B,B,77C]C]--AllAll thethe CommissionersCommissioners areare empoweredempowered toto determinedetermine thetheamountamount of of duedue fromfrom anyany employer employer under under thethe actact..If If thethe determinationdetermination of of thethe amountamount isis notnot perfect, perfect, thethe inspector inspector cancan rere--openopen thethe casecase for for further further inquiryinquiry. .

Em ployees Em ployees PFP F appellateappellate tribunaltribunal [ Sec[Sec..77N]N]


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MISCELLANEOUS PROVISIONSMISCELLANEOUS PROVISIONS

I nterest payable by employer :I nterest payable by employer : [Sec.7Q][Sec.7Q]The employer is liable to pay simple interest @ 12% perThe employer is liable to pay simple interest @ 12% perannum.annum.

E mployer not to reduce wages and othersE mployer not to reduce wages and others[Sec.12][Sec.12]

Special provisions relating to existing PFSpecial provisions relating to existing PF[Sec.15][Sec.15]

Transfer of accounts [Sec.17A]Transfer of accounts [Sec.17A]


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ProvidentProvident FundFund CodeCode

ReturnsReturns- - TheThe monthlymonthly returnreturn of of joining joining && leavingleaving of of employee semployee s isis sendsend inin FormForm--55 && FormForm--1010.. TheThe statusstatus of of maintenancemaintenance of of submissionsubmission of of FormForm--55 && 1010 byby thetheCompany/Establishment Company/Establishment or or byby thethe contractorcontractor isis asas perper thetheStateState LawLaw DirectivesDirectives..

PP..FF.. NumberNumber Allocation Allocation -- TheThe PP..FF.. NoNo.. isis beingbeing allocatedallocatedtoto theirtheir employeesemployees byby thethe companycompany forfor depositingdepositing thethe PP..FF..contributioncontribution onon monthlymonthly basisbasis..


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VARIOUS FORMSVARIOUS FORMSFormForm 22-- ForFor NominationNomination. .

FormForm 55 &&1010-- ForFor newnew joining joining andand leavingleaving of of thethe employeesemployees. .

FormForm 1313-- ForFor transferringtransferring thethe Provident Provident FundFund account account of of aa membermemberfromfrom oneone establishment establishment toto anotheranother establishment establishment coveredcovered underunder thethe act act / /schemescheme. .

FormForm 1919-- ToTo bebe submittedsubmitted byby aa membermember toto withdrawwithdraw hishis Provident Provident FundFundduesdues onon leavingleaving service/retirement/terminationservice/retirement/termination. .

FormForm 2020-- InIn thethe event event of of deathdeath of of member,member, thisthis formform isis toto bebe usedused byby aanomineenominee / / familyfamily membermember toto claimclaim thethe member'smember's Provident Provident FundFundaccumulationaccumulation. .

FormForm 1010 CC-- ForFor claimingclaiming :: RefundRefund of of EmployerEmployer shareshare / / WithdrawalWithdrawalbenefit benefit /Scheme /Scheme certificatecertificate forfor retentionretention of of membershipmembership. .

FormForm 3131-- ForFor thethe useuse of of Provident Provident FundFund membersmembers toto availavail advancesadvances / /withdrawalswithdrawals asas providedprovided inin thethe schemescheme. .


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PENALTIES & COGNIZANCE OFPENALTIES & COGNIZANCE OF

OFFENCES {sec 14}OFFENCES {sec 14}If any person, for the purpose of avoiding any payment to be madeIf any person, for the purpose of avoiding any payment to be madeunder the Act or the Schemes, knowingly makes any false statement under the Act or the Schemes, knowingly makes any false statement or false representation, he would be punished with imprisonment upor false representation, he would be punished with imprisonment upto one year, or with fine up to Rs. 5000.00 or with both.to one year, or with fine up to Rs. 5000.00 or with both.

Making default in paying prescribed employees contributionMaking default in paying prescribed employees contributiondeducted from wages is punishable with imprisonment for 1deducted from wages is punishable with imprisonment for 1- -3 years3 years& fine of Rs.10,000.& fine of Rs.10,000.

If any employer makes default in payment of the administrativeIf any employer makes default in payment of the administrativecharges payable under the Deposit Linked Insurance Scheme undercharges payable under the Deposit Linked Insurance Scheme undersection 6section 6- -C or inspection charges, he would be punished withC or inspection charges, he would be punished withimprisonment up to 6 month to 3 years plus fine up to Rs. 5000.imprisonment up to 6 month to 3 years plus fine up to Rs. 5000.


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OFFENCES {sec 14}OFFENCES {sec 14}Non payment of inspection charges under the Deposit Linked InsuranceNon payment of inspection charges under the Deposit Linked InsuranceScheme is punishable with imprisonment from 6 months to one years plusScheme is punishable with imprisonment from 6 months to one years plusfine up to Rs. 5000.fine up to Rs. 5000.

If any person makes default in complying with any other provision of theIf any person makes default in complying with any other provision of the Act, he would be punished with imprisonment upto 1 year but which shall Act, he would be punished with imprisonment upto 1 year but which shallnot be less than 1 month and with fine upto Rs. 4000.00 or with both.not be less than 1 month and with fine upto Rs. 4000.00 or with both.

If any person convicted of an offence under the Act or the SchemesIf any person convicted of an offence under the Act or the Schemescommits it again, he would be punished with imprisonment upto five yearscommits it again, he would be punished with imprisonment upto five yearsbut which shall not be less than two years, plus fine upto Rs. 25000.but which shall not be less than two years, plus fine upto Rs. 25000.

The offence relating to default in payment of any contribution especially theThe offence relating to default in payment of any contribution especially theemployee's share deduct from the wages of the employees by the employeremployee's share deduct from the wages of the employees by the employeris cognizable. That means a person committing such offence can beis cognizable. That means a person committing such offence can bearrested by the police without warrant.arrested by the police without warrant. {Section 14(AB)}{Section 14(AB)}


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OFFENCES {sec 14}OFFENCES {sec 14}No court is to take cognizance of any offence under theNo court is to take cognizance of any offence under theact or the scheme except on a written report by anact or the scheme except on a written report by aninspector which is sanctioned by the chief PFinspector which is sanctioned by the chief PFCommissioner or an officer authorized by the centralCommissioner or an officer authorized by the central

government.government.When an employer is convicted of an offence relating toWhen an employer is convicted of an offence relating todefault in the payment of contribution or transfer of default in the payment of contribution or transfer of accumulation, the court in addition of awarding anyaccumulation, the court in addition of awarding anypunishment, by order require him to pay the amount punishment, by order require him to pay the amount

within a specified period. If the employer does not within a specified period. If the employer does not comply with the order he is liable to pay fine which maycomply with the order he is liable to pay fine which mayextend to Rs.100 for everyday of default.extend to Rs.100 for everyday of default.


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RECOVERY OF DAMAGESRECOVERY OF DAMAGESIn 1991, the Central Government, by inserting Para 32In 1991, the Central Government, by inserting Para 32- -A Ain the Employees' Provident Funds Scheme, has laidin the Employees' Provident Funds Scheme, has laiddown different rates of damages depending upon thedown different rates of damages depending upon theperiod of default.period of default.

DamagesDamages: :Less than 2 monthsLess than 2 months .@ 17% per annum.@ 17% per annumTwo months and above but less than up to four monthsTwo months and above but less than up to four months

.@22% per annum.@22% per annum

Four months and above but less than up to six monthsFour months and above but less than up to six months.@ 27% per annum..@ 27% per annum.


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RECOVERY OF DAMAGESRECOVERY OF DAMAGES

In case an employer makes default in theIn case an employer makes default in thepayment of contributions to the funds, or in thepayment of contributions to the funds, or in thetransfer of accumulations or in the payment of transfer of accumulations or in the payment of

any charges, the central PF Commissioner or anany charges, the central PF Commissioner or anofficer authorized by the central govt. mayofficer authorized by the central govt. mayrecover from him.recover from him.Damages not exceeding the amount of arrears,Damages not exceeding the amount of arrears,as may be specified in the scheme.as may be specified in the scheme.The central board of trustees may reduce orThe central board of trustees may reduce orwaive the damage.waive the damage.


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CONCLUSIONCONCLUSION


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THA NKSTHA NKS

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26561632 Presentation on PF Misc Provision Acts 1952

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