What is PF and ESI Returns?

Provident Fund or PF is a social security system that was introduced for the purpose of encouraging savings among employees, so as to benefit them during the course of their retirement. Contributions are made by the employer and the employee on a monthly basis. PF contributions can only be withdrawn by the employee at the time of his/her retirement, barring a few exceptions. All employers having PF registration are responsible to file returns on a regular basis. 25th day of the month is the last for employers to file in the PF return.

What is PF and ESI Returns?

Employees State Insurance or ESI Return is required to be file on or before 15th of following month. For example, due date of filing April month ESI return is 15th of May. Employee’s State Insurance (ESI) is a self-financing social security and health insurance scheme for Indian workers. For all employees earning Rs. 21,000 or less per month as wages, the employer must contribute 3.25% and employee must contribute .75% towards ESI.

Advantages of Filing PF Returns

It gives the organisation a moral view as they are interested in the employees welfare as much as the work they give out.

ESI returns keeps the total ESI process transparent indicates what the company has actually contributed.

The PF process is totally taken care by the Employees Provident Fund Organization of India which provides a peace of mind and is secure in nature.

As per Employee Deposit Linked Insurance scheme, in any organization where group insurance scheme is not available to the employees, the organization has to contribute 5% of monthly basic pay as premium for the life insurance cover.

The employee can withdraw six times his or her worth salary or the entire PF amount based on whichever is lesser at that point of time, and the thus taken funds can be used for personal or blood relationship medical needs.

The employer contribution is exempt from tax and employee’s contribution is taxable but eligible for deduction under section 80C of Income tax Act with proper returns filing.

Documents Required for PF Returns

1. Employee wise breakup of the PF contribution received and made.
2. Digital Signatures.
3. Copy of the Challans for payment of PF.

Advantages of Filing ESI Returns

Medical Benefits
Complete Medical care benefit to insured person and their family members from the date of insurance. There is no ceiling on expenditure to be incurred on treatment and nature of disease

Sickness and Disabled
Sickness Compensation to insured employees at rate of 70% of wages for certified sickness period upto 90 days and for disability compensation rate is 90% of wages.

Maternity Benefit
Maternity benefit of pregnancy is payable at rate of 100% of wages for period of 26 weeks and this period can be further extended up to one month on medical advice.

Other Benefits
Funeral Expenses up to Rs. 15000 to dependent and other benefits includes vocational rehabilitation, physical rehabilitation, old age care, Rajiv Gandhi Shramik Kalyan Yojana, Atal Beemit Vyakti Kalyan Yojana etc.

Documents Required for ESI Return Filing

Existing Employees
• Employees Attendance register
• Wages Register
• Inspection Book, if any
• Accident detail
New Employees
• New employees joined during the month
• Employees left during the month
• Aadhaar Card
• Mobile Number
• Family Member Details

FAQ on PF and ESI Returns

Q Is it Mandatory for the employer to register under ESI Scheme?
Yes.It is the Statutory responsibility of the employer to register the Factory or Establishment under the ESI Scheme within 15 days from the day of its applicability.

Q How can employees get registered under the Scheme? When an employee joins insurable employment, he has to fill in a Declaration Form (form1) and submit a family photo in duplicate to the employer.
The employer then submits the documents to the ESI Branch Office.
The employee is then allotted an insurance number, the same number is then used for the purpose of his identification under the scheme. He is further issued a temporary identity card for availing medical benefit for self and family for a period of three months.
Thereafter, he is provided with a permanent photo identity card. A person once registered need not register again in case of change of employment. The same registration can be transferred from one place to the other.

Q Who must register with Employees State Insurance Corporation?
Any entity, be it a government office, public sector or private sector entity which has 10 or more employees needs to get registered under the Scheme. The application must be filed within 15 days of reaching the employee count of 10.
Where the employer wishes to provide the benefits to his/her employees, he may voluntarily apply for registration.

Q What is the contribution rate to the ESI fund?
Eligible employee needs to contribute in total 1.75% of their salary (basic+allowances). Registered Employers need to deposit 4.75% of salary paid(basic+allowances) to ESI corpus every month.

Q What benefits from filing PF Returns ?
Both the employer and employee contributes to the EPF at a rate of 12% of the basic salary and dearness allowance (if any) every month. The total contribution to the EPF is thus 24% per month.
The rate of Interest would be only decided by the Union Government.
The returns must be filled by the employer on monthly basis in order to keep the contribution level legal and transparent.
The Companies whose employees count is more than 20 are entitled for mandatory returns commitment statement i.e the returns must be filed to the council.
ESI is an autonomous corporation under Ministry of Labour and Employment, Government of India. Unilex can help you obtain ESI returns for your business.

Q How to calculate Interest in EPF?
The rate of interest on EPF is determined by the Union government, in consultation with the central trustee board.The interest calculated on EPFs, for the 2015-16 fiscal, is 8.75%. while contribution to the EPF is monthly, interest is calculated at the end of the fiscal.
The compound interest is paid by the government on the time of April 1st every year and is overlooked by the central government.

Q When can PF be withdrawal?
There are 3 cases involved:
PF final settlement
PF partial withdrawal
Pension withdrawal benefit.