Dear All, After the new SC ruling w.r.t EPF some employees in my organisation drawing a BASIC SALARY of More than 21000 (keeping in mind the stat limit of RS 15000) have requested to withdraw from the EPF scheme completely while continuing their service with the company.
I understand there is no fixed format which needs to be presented to the RPFO for initiating such OPT out by existing employees. Therefore I request the experts to shed some light on this topic as to how the same has to be done.
Certain common things about these employees;
1) All are drawing salaries way above the statutory limit of EPFO.
2) All of them are based in New Delhi area.
3) All have completed an average 2 years with the company.
4) All of them at the time of joining my company had opted for EPF wherein the deductions till Jan 2019 were happening on 12% of Basic salary .
5) All have been issued a UAN.
Besides understanding the process of opt out of EPF while in service I would also request the following information.
a) In the event they leave my company for another company and in the next company if they want to have EPF deducted then will they be eligible to do so.
b) All of these employees are senior persons with EPF contributions for the last 15-20 years in such case some have transferred their EPF from company to company.Now when they opt out can they withdraw the PF contribution.
Also since they have completed more than 10 years EPF contribution will they be eligible for pension.
c)Lastly what will happen to their UAN will they have to surrender it or leave it as it is.
d) What is the impact on my company if these existing employees request to stop contribution completely. Will the company have to pay any token amount whatsoever.
Please advice as they want to stop EPF contribution at the earliest.
From India, Mumbai
5I understand there is no fixed format which needs to be presented to the RPFO for initiating such OPT out by existing employees. Therefore I request the experts to shed some light on this topic as to how the same has to be done.
Certain common things about these employees;
1) All are drawing salaries way above the statutory limit of EPFO.
2) All of them are based in New Delhi area.
3) All have completed an average 2 years with the company.
4) All of them at the time of joining my company had opted for EPF wherein the deductions till Jan 2019 were happening on 12% of Basic salary .
5) All have been issued a UAN.
Besides understanding the process of opt out of EPF while in service I would also request the following information.
a) In the event they leave my company for another company and in the next company if they want to have EPF deducted then will they be eligible to do so.
b) All of these employees are senior persons with EPF contributions for the last 15-20 years in such case some have transferred their EPF from company to company.Now when they opt out can they withdraw the PF contribution.
Also since they have completed more than 10 years EPF contribution will they be eligible for pension.
c)Lastly what will happen to their UAN will they have to surrender it or leave it as it is.
d) What is the impact on my company if these existing employees request to stop contribution completely. Will the company have to pay any token amount whatsoever.
Please advice as they want to stop EPF contribution at the earliest.
From India, Mumbai
Dear Friend,
1. If an employee already a member of PF then contribution is subject to Max of 15,000/-.
If an a employee not an a member of provident fund earlier , if he is fresher for the PF while joining and his Basic is more than 15,000 then exemption grated by filling form no 11.
2. If employee completed 10 years in Pension contribution ,he may avail pension scheme certificate from EPFO.
3. UAN will be active till his last employment, if he joins any other company after 10 years then the same UAN will be activate.
From India, Mumbai
1. If an employee already a member of PF then contribution is subject to Max of 15,000/-.
If an a employee not an a member of provident fund earlier , if he is fresher for the PF while joining and his Basic is more than 15,000 then exemption grated by filling form no 11.
2. If employee completed 10 years in Pension contribution ,he may avail pension scheme certificate from EPFO.
3. UAN will be active till his last employment, if he joins any other company after 10 years then the same UAN will be activate.
From India, Mumbai
Dear Ravi
Thanks for your response.
However if you careful read my query I have already stated what you have mentioned.
My query is different altogether as I want to know the DISCONTINUATION OF EPF CONTRIBUTION while in CURRENT EMPLOYMENT.
If you are aware of that please shed light on that aspect.
Regards
Anuradha
From India, Mumbai
Thanks for your response.
However if you careful read my query I have already stated what you have mentioned.
My query is different altogether as I want to know the DISCONTINUATION OF EPF CONTRIBUTION while in CURRENT EMPLOYMENT.
If you are aware of that please shed light on that aspect.
Regards
Anuradha
From India, Mumbai
The employees contribution to EPF is too high and wants to invest in other sec 80C tax savings options.
From India, Mumbai
From India, Mumbai
Dear Anuradha,
EPF regulation doesn't allow exemption because of employee basic is high , if employee basic is more than 15,000 then he needs to contribute max on 15,000 i.e 1800.
Only we can exempt employee in above cases read my point no 1.
And as you said, You want show in other tax saving option , as per new guidelines except HRA, any other allowances given to employee that will consider as Basic for PF calculation purpose.
From India, Mumbai
EPF regulation doesn't allow exemption because of employee basic is high , if employee basic is more than 15,000 then he needs to contribute max on 15,000 i.e 1800.
Only we can exempt employee in above cases read my point no 1.
And as you said, You want show in other tax saving option , as per new guidelines except HRA, any other allowances given to employee that will consider as Basic for PF calculation purpose.
From India, Mumbai
Dear Ravi
Thanks for your response.
In continution of your response I understand that once an employee has voluntarily or due to stipulation enrolled into the EPF scheme he/she cannot opt out but of the EPF scheme for the duration of his/her employment but at best limit his/her contribution to Rs 15000 of Basic as upheld by the SC in Marathwada Bank case.
However I am still not fully convinced with your view as exemption and opt out cannot be construed similar since the latter is based on certain stipulations whereas opting out is will fully let going of one's right provided he/she is not in contravention of any said law.
Thus hypothetically speaking if a employee wants to opt out of the EPF scheme he/ she can resign from the company(withdraw all amounts and from the EPF Scheme using the CCF ) and work for a brief period as a retainer with the company. On the end of this retainership period he/she can be reabsorbed into the company as FTE opting out of EPF !
Please share your opinions on the same.
Warm Regards
Anuradha
From India, Mumbai
Thanks for your response.
In continution of your response I understand that once an employee has voluntarily or due to stipulation enrolled into the EPF scheme he/she cannot opt out but of the EPF scheme for the duration of his/her employment but at best limit his/her contribution to Rs 15000 of Basic as upheld by the SC in Marathwada Bank case.
However I am still not fully convinced with your view as exemption and opt out cannot be construed similar since the latter is based on certain stipulations whereas opting out is will fully let going of one's right provided he/she is not in contravention of any said law.
Thus hypothetically speaking if a employee wants to opt out of the EPF scheme he/ she can resign from the company(withdraw all amounts and from the EPF Scheme using the CCF ) and work for a brief period as a retainer with the company. On the end of this retainership period he/she can be reabsorbed into the company as FTE opting out of EPF !
Please share your opinions on the same.
Warm Regards
Anuradha
From India, Mumbai
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