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Recently, the Employees Provident Fund Organisation (EPFO) asked all pending proposals for income tax exemption for nearly 300 exempted private provident fund trusts to be submitted to it by November. All these trusts have been exempted on a 'deemed’ basis so far and may get approval for their pending proposals. However, there could be some who may not be allowed to continue with the exemption.
Says a Bangalore-based Regional Provident Fund Commissioner (RPFC), “Those companies which have been irregular with payments to the provident fund account in the Trust may not be allowed continue with the exemption. And there are scores of such firm. This is a good way to catch irregular companies.”
The EPFO website has a list of top 50 defaulters --- Ramky Infrastructure, Hyderabad (Total default = Rs 3,915.36 lakh between April 2009 and March 2011), HMT Watch, Dehradun (Total default = Rs 3,029.63 lakh between July 2004 and January 2008), Ahluwalia Contracts India, Delhi (Total default = Rs 5,457.34 lakh between September 2007 and March 2009) and Madhya Pradesh State Road Transport Corporation (MPSRTC), which has various amounts pending at different EPF offices across the state.
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Many companies who deduct contribution towards provident fund from their employees' salaries do not deposit the same with their trust or with EPFO. These companies continue this for years at length while most employees aren't aware of it. And one day hell breaks loose when they find out there is no retirement corpus they thought they were accumulating.
The EPFO says if a company is found to be non-complaint with its provident fund amount deposition, it will not only have to cough up the outstanding but also pay an interest penalty on the same, depending on the number of days of delayed payment. For instance, if the delay if for less than 2 months, then the interest payable will be 5% yearly above the amount payable for the number of days of delay in making payment. Similarly,
2 months and above but less than 4 months = 10% a year
4 months and above but less than 6 months = 15% a year
6 months and above = 25% a year
If you still find your employer has not submitted the deducted PF with the trust or EPF, you can file a complaint with either RPFC or file a criminal case against your employer with the Police or complain to the Chief Vigilance Officer appointed by the Labour Ministry. You need to produce a copy of your salary slip to show the deduction, which does not reflect in the account balance.
“Most employees do not know these ways of dealing with a defaulting employer. And they don't even know their account balance. Hence they don't know if to put in the time to fight for it. At the same time, these redressal processes take their own time and don't guarantee recovery all the time,” says the RPFC.
To be able to know if your employer is depositing your EPF contribution you can ask your employer for a copy of Form 12, which gives the details of money deducted from employees salary. Employers need to submit this form to EPFO towards the end of each month. “But, employers may decline to furnish Form 12 to employees,” says the RPFC.
You could also file a Right to Information (RTI) application to the regional EPFO for the same. You need to mention your EPF account number and your employer code.
