EPF new rule: Retirement fund physique reduces penal costs for delayed contributions by employers

The Staff’ Provident Fund Group (EPFO) has lowered penal costs for employers who fail to deposit their workers’ provident fund, pension, and insurance coverage contributions on time.

Based on a notification issued by the Ministry of Labour on Saturday, defaulters will now be charged a penalty of 1% monthly or 12% every year for excellent contributions beneath the Worker Pension Scheme (EPS), Staff’ Provident Fund (EPF) Scheme, and Staff’ Deposit Linked Insurance coverage (EDLI) Scheme.

This marks a discount from the earlier most penalty of 25% every year.

Beforehand, penalties have been calculated at 5% every year for defaults lower than two months, 10% for defaults between two to 4 months, 15% for defaults between 4 to 6 months, and 25% for defaults exceeding six months.

This revision is anticipated to reduce the monetary burden on employers who default for prolonged durations.

Nonetheless, there will probably be no important adjustments in penalties for employers who default for lower than 4 months.

At the moment, it’s obligatory for employers to submit the earlier month’s returns to EPFO ​​by the fifteenth of every month, and any delay past that is thought of a default.