Provident Fund (PF) Registration

1. Overview

The Government of India runs a retirement savings scheme called Provident Fund (PF), where some portion of the employee's salary is contributed by both the employer and employee to help the employee financially stable in his old age. PF is sponsored by the Employees' Provident Fund Organization (EPFO) under the EPF & MP Act, 1952, and serves as a way of a reliable source of savings for employees who are looking to have assured savings available post their retirement or during emergencies.

PF registration is mandatory for businesses with 20 or more employees. The scheme applies to both private and public sector organizations, making it a crucial element of employee welfare in India. Contributions from both employer and employee are pooled into the employee’s PF account, which can be accessed in specific cases like retirement, medical emergencies, or housing loans.

2. Benefits

Benefits from PF registration are available to employers and employees.

Retirement savings:

An employee makes sure that a bigger chunk of his salary is saved for the future, ensuring financial independence throughout his post-working years.

Tax Benefits:

The contribution made by the employer as well as employees are eligible for tax benefits under Section 80C of the Income Tax Act, encouraging both parties to participate in this scheme.

Pension Facility:

A part of the employer's contribution is diverted; the employer's contribution goes towards the Employee Pension Scheme (EPS), providing employees with a pension post-retirement.

Withdrawals for Emergency:

You can take a partial withdrawal to meet financial needs like medical treatment, marriage expenses, home loan repayment, etc., without breaking the entire fund.

Insurance Cover:

Under the Employees’ Deposit Linked Insurance (EDLI) scheme, employees are eligible for life insurance coverage in case of death during employment, offering financial relief to their dependents.

3. Procedure for PF Registration

1. Visit the EPFO website.

Go to the official EPFO website: https://www.epfindia.gov.in. Select “Establishment Registration” on the homepage under the “For Employers” section given there.

2. Sign up on the EPFO Portal

Press on the “Sign Up” button to create a new employer login. Enter the required details like the company name, email ID, and mobile number and create a password. After submitting, you’ll receive a verification email to your registered email ID. Click on the link in the email to verify your account.

3. Login and Register

After once successful verification via OTP, log in using your credentials. Once logged in, select the "Register New Establishment" option and proceed with the registration process.

4. Complete Establishment Details

Enter the establishment’s details such as what type of business you are in, PAN information, address, and other information. Make sure to provide accurate information, as this will be verified by the EPFO authorities.

5. Include employee information

Next, provide the details of your employees, including their names, salary structure, date of joining, and UAN (Universal Account Number). The system will generate UANs for employees without them.

6. Check the digital signature

An employer’s signature is required to authenticate your registration; as a result, you will also demand a digital signature of a class 2 or class 3 digital signature certificate to authenticate the details you have provided in this form with them.

7. Submit the application

Fill it out only when you have entered all info correctly, including all of your establishments and employee’s information, and every document has been verified with the digital signature. The form will generate an establishment ID upon successful submission, signifying its appropriate completion.

4. Documents Required for PF Registration

To successfully register for PF, employers need to keep the following documents ready:

• PAN Card: Proof of the company's identity.
• Certificate of Incorporation: For companies, this serves as proof of business registration under the relevant governing bodies.
• Address Proof: The establishment requires a valid address proof, such as electricity bills, rental agreements, or a registered office address.
• Employee Details: Name, UAN, joining date, and salary details of current employees.
• Employer digital signature: It is mandatory to validate the registration details with an employer's authorized digital signature.

5. Frequently Asked Questions (FAQs)

1. Is PF registration mandatory for all businesses?

A business with 20 or more employees is required to register for the Provident Fund under the EPF Act, 1952.

2. What is the contribution rate for PF?

Both the employer and the employee contribute 12% of the employee's basic salary. The Employee Pension Scheme (EPS) receives 8.33% of the employer's contribution, while the PF receives the remaining 3.67%.

3. What is the PF withdrawal option for employees before retirement?

Employees can withdraw a portion of their PF for reasons like medical emergencies, housing loans, or marriage. Full withdrawal is possible only at the time of retirement or unemployment for more than two months.

4. What is UAN?

The UAN (Universal Account Number) is a unique 12-digit number given to each employee by their employer. It never changes throughout a career. The purpose of the UAN is to track all PF contributions in a single account.

5. What happens if an employer fails to register for PF?

Failure to register for PF can result in heavy fines and legal action by the EPFO. Employers are liable to pay both the employer’s and employee’s contributions, along with interest and penalties for noncompliance.

6. How long does it take to get the PF registration approval?

Typically, the process takes about 5 to 7 working days if all required documents and information are in order.