Got excess money from EPFO?

If so, you have to return it. But keep proof of all documentation and ask for calculation details to verify facts

Provident Fund money is something that salaried employees are assured of even if their salaries are delayed or if their company shuts down. This is because not crediting PF money invites strict penalty for companies. So, it is surprising when an employee get a notice from the EPFO for refund of excess money. 

An employee with a media company who recently left the organisation, received a letter from the EPFO, that was forwarded by his former employer, asking him to refund the excess amount that had been erroneously credited to his account at the time of settlement. 

The letter also said if the employee failed to refund the excess amount, the EPFO would attach and freeze his bank account. He was asked to repay the excess amount by cheque to the Regional PF Commissioner. The EPFO gave a time frame of about 20 days to refund the money.

According to K K Jalan, Central Provident Fund Commissioner, such instances are rare now, since the EPFO has moved its operations online. "It may have happened due to wrong calculation or if one subscriber's PF money is transferred to another subscriber's account. Sometimes employers also credit the wrong amount. Subscribers can ask to see the calculation by registering their grievance on the EPFO's website. There is no prescribed form for this and there is no time frame for subscribers to refund the money," he says.

There have been such instances earlier when EPFO used to operate manually, says Malhar Majumder, Partner, Positive Vibes Consulting and Advisory. "Excess funds get credited due to mistake in interest calculation. If you get such a notice from EPFO, always keep proof of all the documents because you will have to declare it in your Income Tax returns as well. You have no option but to return the money. But keep a copy of the receipt," Majumder advises.

EPFO has the power to attach subscribers' accounts, under the same rule that applies to companies when they default on their employees' PF payment. The EPFO attaching companies' accounts happens often, Jalan adds.

Majumder agrees that in case excess money has been paid, then subscribers have no option but to refund it, since EPFO has the power to attach subscriber's account. But instances of this happening in case of individuals are rare.

Suresh Sadagopan, a certified financial planner says that subscribers must always ask for a detailed calculation of the interest paid to verify that they have received excess money. "Send a mail reason to the EPFO and explain that you need to see the details of your account, how the interest has been calculated, etc. This is case where the EPFO official has made a mistake. There is no reason why subscribers should suffer,'' he says. If required, Sadagopan suggests taking legal help, though it could be a long winding process. 

Both employe and employer contribute 12% each of the basic salary towards EPF. For the year 2015-16 the government has fixed the EPF rate at 8.7%.

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