What Is PF Return Filing?

PF return filing means filing of PF returns online with the EPFO. Such returns feature details related to employer and employee payments made towards the provident fund. They also include essential details such as total wages,  employee count, and PF account numbers. These returns must be filed each month, and non-compliance is punishable by penalties and fines.

Employers must adhere to a wide variety of regulations to keep business running as smoothly as possible. One of the implementations is PF annual return filing, which refers to the PF return submission process to the Employees' Provident Fund Organization (EPFO). Services Plus, provide all the detailed and necessary procedures for creating the smooth annual compliance.

Benefits Of PF Return Filing

• Mandatory Filing: Filing a PF return is a legal necessity, and failure to do so can result in penalties and fines.
  
  
• Employee Benefits: Filing the PF returns online on time protects the employees' contribution and forms a part of their social security.
  
  
• Tax Benefits: By filing PF returns on a timely basis, the employers may avail themselves of tax benefits on PF contributions.
  
  
• Regular PF return filing: company helps employers in keeping systematic records of the employee PF contribution, which helps in managing their benefits.

PF Contributions Taxation

Taxation rules for Provident Fund  (PF) contributions fall within the ambit of the Income Tax Act, 1961. Below is a composite on the taxation of various components of PF:

Employer’s Contribution to PF

• The employer’s contribution to the Employees’ Provident Fund (EPF) is tax-free up to 12% of the employee’s basic salary plus dearness allowance (DA).
  
  
• If the employer contributes above ₹7.5 lakh in any financial year (including other retirement contributions such as the National Pension Scheme (NPS) and the Superannuation Fund), then the excess is taxed in the hands of the employee through the PF return filing company.

Employee’s Contribution to PF

• The employee’s contribution towards EPF is also tax deductible under Section 80C of the Income Tax Act, to the extent of ₹1.5 lakh per annum.
  
  
• If an employee contributes more than the mandatory 12%, there is no tax benefit on the excess amount.

Interest on PF Contributions

• Interest is tax-free up to 9.5% p.a. Any interest above this limit is taxable under the head of "Income from Other Sources" if the interest rate is more than this threshold.
  
  
• As part of the budget for FY 2020-21, it was proposed that, PF return online filing from FY 2021-22 onwards, the interest on an employee’s own contribution to PF would be taxable if the contribution in a financial year exceeded ₹2.5 lakh. (For GPF holders — government employees — the limit is ₹ 5 lakh.)

Taxation on PF Withdrawal

• Withdrawals after 5 years of uninterrupted service: Tax exempt.
• Taxation on withdrawals in the first 5 years:
• Employer’s contribution and interest: Taxable as salary income
• Employee’s contribution: Exempt (if have claimed under 80C earlier, then it is taxable).
• Interest on employee’s contribution: Taxable under “Income from Other Sources.”

(If PAN is provided and the amount withdrawn is more than ₹ 50,000, TDS is @ 10 %): In case no PAN is available, TDS on it is 30%.

Taxation of Voluntary Provident Fund (VPF)

• If an employee contributes more than 12% of his salary to PF voluntarily, the amount over 12% is treated as a Voluntary Provident Fund (VPF).
  
  
• Since VPF contributions are eligible for 80C deductions, interest earned is taxed as per EPF rules.

Checklist for PF Return Online Filing:

Key Compliance Requirements

• PF Returns on a Monthly Basis (Due: 15th of next month)
• Challenges under the new PF regime: The forms that need to be submitted as per the new PF
• regime are: Form 5– For new employees joining PF
• Form 10: Information of employees who have left the organization
• ECR: (Electronic Challan cum Return)–Yearly contribution details

Note: All years PF returns due date is 30th April for next Financial Year.

• Form 3A: Annual contribution statement dynamic towards employees.
• Form 6A:  Basic annual contributions statement.

[As prescribed under the EPF Act, the late filing of PF returns can lead to penalties and legal consequences.]

Documents Required for PF Registration

Depending on the service entity, businesses are required to submit certain documents to register for the Employee's Provident Fund (EPF) with the Employee's Provident Fund Organization (EPFO). Here is a list of required documents:

1. General Documents: Similar to All Business

1.  PAN of the Business — needed for filling taxes and verification.

2. Certificate of Incorporation—if applicable, depending on entity type:

• No LLP Form: 8 (by Companies)
• For partnership firms: a partnership deed is prepared.
• Proprietorships: Business Registration Certificate

3. GST Registration Certificate, if any.

4. Proof of address of the establishment (any one of the below):

• Electricity Bill / Rent Agreement / Property tax receipt

5. Business Bank Details: Cancelled cheque or bank statement through which PF annual return filing amount should be applied by company.

6. Specimen Signature of the Employer: We require the Digital signature         (DSC) of the employer for online filing.

7. Employee level: Salary details, UAN (if applicable), joining date, and designation.

    B. More Documents in accordance with the type of business

1. In case of private limited/public limited companies

•  MOA (Memorandum of Association) & AOA (Articles of Association)
• EPF Registration Board Resolution
• Copies of Aadhaar & PAN Card of Director

     2. For Partnership Firms

•  Partnership Deed
•  PAN Card of Firm & Partners
• Aadhaar & PAN of Partners

   3. For Proprietorship Firms

• Karta Aadhaar & PAN Card
• Shop & Establishment Act License or MSME Certificate

   4. For NGOs, Trust & Society

• Society Registration Certificate /Trust Deed
• Trustees/Governing Body Members List

   C. Required Employee Info for PF Registration

• NAME & DATE OF BIRTH (AS PER AADHAAR)
•  Aadhaar Card & PAN Card
• Mobile Number & Email ID
•  UAN (if earlier registered in EPF)
• Salary Structure & Joining Date

  D. Registration Process Overview

1️. Go to EPFO’s Unified Portal– https://unifiedportal-emp.epfindia.gov.in/

2️. Complete the Employer Registration Form.

3️. Upload Required Documents

4️. Verify via DSC (Digital Signature Certificate).

5️. Get PF Registration Number (Establishment Code) for your PF return filing company. 

Procedures For PF Return Filing:

Adapting the PF return filing process as per the unified portal: Employers need to adapt their PF return online filing process as per the guidelines/formats of the Unified Portal for PF filing.

Mandatory PF Registration: Whenever a new establishment is opened with the Employees Provident Fund System, they need to file for a timely return.

PF Forms and Reports as Applicable:

Form 2: Declaration Nomination

Form 2: For declaring nominations under Employees' Provident Fund and Employees' Family Pension Scheme. This form is generally filled in by employees when joining an establishment and must be submitted along with Form 5. Form 2 consists of two parts:

Part A:

• Nominee's Name and Address
• Relationship with the subscriber
• Nominee's Age
• Amount which has to be paid
• Guardian Information (If the nominee is a minor)
• Signature or thumb impression at the end of the section

Part B:

• Nominee information described in Part A
• Membership details for entitlement to children's/widow's pension
• Signature or thumb impression at the end of the section

Form 5: Monthly Report

• The Form 5 is a monthly return that contains the details of employees who have been newly enrolled in the provident fund scheme through the PF return filing company. Here, basic info should include organization name, organization address, organization code, employee account number, employee name, father or husband’s name (middle name), date of birth, date of joining, and work experience. The form must be stamped and dated with the employer.

Form 10: Monthly Report

• It is a monthly report that enumerates employees who have stopped being part of the scheme in a month. It contains account numbers, names of employees, names of the father/husband, service-exit dates, and the reason for exiting. The employment must be stamped and dated by the employer.

Form 12A — Report of payment details

• This is why, to report the payment details deposited into each employee account in a specific month, we use Form 12A.

PF annual return filing:

Form 3A:

• This form gives monthly contributions toward the Employee Provident Fund and Employee Pension Fund for all members throughout the relevant year for the PF annual return filing. This swipe is packed with information, including account numbers, the names of the subscribers, details of their establishments, the rates of contribution, and any voluntary donations. It should be signed and sealed by the employer.

Form 6A:

• Form 6A is an annual contribution statement, and it contains the total annual contributions for all the members of the establishment. In addition to account numbers, subscriber names, wages, DA, contribution deductions, employer contributions, advance refunds, higher voluntary contributions, remarks, and some other details. It also needs to include the month of contribution, contributions remitted, EDLI and Pension Fund contributions, administrative charges, and total contributors in the given form.