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.
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
(If PAN is provided and the amount withdrawn is more than ₹ 50,000, TDS is @ 10 %): In case no PAN is available, TDS on it is 30%.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
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
Note: All years PF returns due date is 30th April for next Financial Year.
[As prescribed under the EPF Act, the late filing of PF returns can lead to penalties and legal consequences.]
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. PAN of the Business — needed for filling taxes and verification.
2. Certificate of Incorporation—if applicable, depending on entity type:
3. GST Registration Certificate, if any.
4. Proof of address of the establishment (any one of the below):
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
2. For Partnership Firms
3. For Proprietorship Firms
4. For NGOs, Trust & Society
C. Required Employee Info for PF Registration
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.
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:
Part B:
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.
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What is PF return filing?
PF return filing is the process of submitting monthly returns to the Employees' Provident Fund Organisation (EPFO). Employers with PF registration must file these returns to report PF contributions, details of employees, and other necessary information.
What is the PF contribution?
Both employers and employees are required to contribute 12% of the employee's basic salary to the Employee Provident Fund (EPF) account.
When is the PF Return filed?
PF returns must be filed by the 25th of each month through the unified portal to ensure compliance with EPFO regulations.
What is ECR in PF?
ECR, or Electronic Challan cum Return, is an electronic monthly return uploaded by employers through the Employer e-Sewa portal. It helps in generating a Challan for online payment of PF dues after approval.
What is UAN?
UAN, or Universal Account Number, is a unique identification number allocated by EPFO. It serves as a single identifier for an individual's multiple member IDs received from different employers.