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Exemption : Provisions of act/ schemes |
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Types of Exemption :- |
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An establishment covered under the Employees' Provident Fund & Miscellaneous
Provisions Act 1952 is required to comply with the statutory provisions of the Act
and also the provisions of the Schemes framed under the Act namely Employees' Provident
Fund Scheme, 1952, Employees' Pension Scheme Scheme, 1995 and Employees' Deposit
Linked Insurance Schemes, 1976.
However, the Act provides for grant of exemption from the operation of the Act and
also exemption from the operation of the Schemes framed under the Act. Thus, the
types of exemptions provided under the Act may be broadly classified as under:
Exemption from the Act ( Including the Schemes ), under Section -16 (2) of the Act.
Exemption from the operation of the Scheme(s) viz. Employees' Provident Fund Scheme
/ Employees' Pension Scheme /Employees' Deposit Linked Insurance Schemes.
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(a) Exemption from the Act ( Including the Schemes ): :- |
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This type of Exemption is allowed under Section 16(2) of the Act by the Central
Government. Exemption from the Act is allowed only to a class of establishments.
It is granted considering the financial or other circumstances of the class of establishments.
This exemption can be given prospectively or retrospectively. It is allowed for
a specified period only. The classes of establishments for which this type of exemption
currently in force are:
Establishments registered under the Societies Registration Act, 1860, run mainly
on grants-in-aid received from the Central Government or the State Government. Establishments
which are employing only ex-servicemen who are in receipt of pension benefits as
admissible under the trust rules for a period of 5 years w.e.f. 18-02-2000. (Notification
dated on 5.4.2000)
Voluntary organisations engaged in leprosy eradication programmes.
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Employees' Pension Scheme :- |
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In this type of exemption, it is only an exemption from the operation of a specified
scheme and not from the Act. Apart from granting exemption to an establishment from
the operation of a particular scheme, the Act also provides for grant of exemption
to an individual employee and also to a class of employees. Thus, exemption from
the operation of the Scheme is granted:
To an establishment as a whole.
To an individual employee ( under the Employees' Provident Fund & Employees' Deposit
Linked Insurance Scheme only )
To a class of employees.
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Issue of Relaxation order under the Employees' Provident Fund & Employees' Deposit
Linked Insurance Schemes : |
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Before granting exemption to an establishment the application of the establishment
and also the rules of the Fund are required to be scrutinised for considering the
grant of exemption. As it may take some time to process the application, the Regional
Provident Fund Commissioner / Central Provident Fund Commissioner as the case may
be, may issue a relaxation order to the establishment specifying that the establishment
may not, pending grant of exemption:
Submit the returns required to be submitted under the Scheme.
Remit the dues to the Fund
Transfer the accumulations from the existing Fund to the C.B.T., Employees' Provident
Fund.
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Exemption from the operation of Employees' Provident Fund Scheme , 1952: |
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Exemption from the operation of Employees' Provident Funds to an establishment as
a whole, is granted either under Section 17(1)(a) or under Section 17 (1)(b) of
the Act. |
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Exemption under Section 17 (1)(a): |
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The grant of exemption to an establishment under Section 17 (1)(a)
is considered where the rates of contribution are not less favourable then the statutory
rates provided in Section 6 of the Act and the employees are also in enjoyment of
other PF benefits which are also on the whole not less favourable than the benefits
provided under the Act / Scheme. The authority to grant this exemption is the 'Appropriate
Government', as defined in Section 2(a) of the Act ( Central /
State Government, as the case may be ) and notified in Gazette. |
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Exemption under Section 17(1)(b): |
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Exemption under Section 17 (1)(b) is granted where the employees
in establishment are in enjoyment of benefits in the nature of Provident Fund, Pension
or gratuity which are separately or jointly on the whole not less favourable than
the benefits provided under the Act / Scheme. It is granted by the 'Appropriate
Government ', through a notification in the gazette. |
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Payment of Inspection charges : |
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The establishment to which Relaxation Order is issued / exemption is granted is
required to pay Inspection charges @ 0.18% of total wages on which Provident Fund
is recovered, to the Regional Provident Fund Commissioner concerned by deposit in
cash / local cheque in S.B.I. to the credit in A/C No. 2 of the Employees' Provident
Fund, through prescribed challan. |
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Exemption of an Employee : (Employees' Provident Fund Scheme ,52 ) |
Section 17 (2) read with para-27 of the Employees' Provident Fund Scheme provides
for exemption from the operation of all or any of the provisions of the scheme to
an individual employee. It is granted by the Regional Provident Fund Commissioner
on the receipt of application in Form-1 from the employee. The exemption is granted
where an employee is entitled to benefits in the nature of Provident Fund, gratuity
or old age pension and such benefits separately or jointly are on the whole not
less favourable than the benefits provided under the Act and Scheme.
The re-election is permitted only once on each account. |
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Exemption of a Class of Employees : ( Employees' Provident Fund Scheme ,52 ) |
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Section 17 (2) read with para-27A of the Employees' Provident Fund Scheme provides
for grant of exemption from the operation of all or any of the provisions of the
scheme to a class of employees. It is granted by the appropriate Government on the
receipt of application from the employer. The exemption is granted where employees
are entitled to benefits in the nature of Provident Fund, gratuity or old age pension
and such benefits separately or jointly are on the whole not less favourable than
the benefits provided under the Act and Scheme.
Wherever the exemption to a class of employees is granted, the employer is required
to submit a monthly return to the Regional Provident Fund Commissioner in the prescribed
Performa. The due date for submission of this return is 25th of the month following
that to which it relates. The employer is required to pay Inspection Charges @ 0.18%
on wages of employees exempted and invest the Provident Fund monies in accordance
with the pattern of investment prescribed by the Central Government. The class of
employee may again be permitted to join the statutory fund. The re-election is permitted
only once on each account.
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Exemption- Provision of Act / Scheme-At a glance |
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S.No. |
Nature of Exemption
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Granted under Act/Scheme
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Authority to grant exemption
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Authority to issue Relaxation Order
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Remarks
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1.
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Exemption from the Act
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Section 16(2) of the Act
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Central Government
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N.A.
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Exemption to a class of Establishment only for a specified period.
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2. |
Exemption from the operation of Employees' Provident Fund Scheme'52
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Section 17(1)(a) or 17(1)(b)
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Appropriate Government
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Regional Provident Fund Commissioner. (para79)
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Exemption to an Establishment as a whole.
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3. |
- Do -
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Section 17(2) read with para 27-A of Employees' Provident Fund Scheme
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Appropriate Government
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Regional Provident Fund Commissioner.
(para 79)
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To a class of employees.
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4. |
- Do -
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Section 17(2) read with para 27 of Employees' Provident Fund Scheme
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Regional Provident Fund Commissioner
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To an individual employee.
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5. |
Exemption from the operation of the Employees' Pension Scheme '95
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Section 17 (1C)
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Appropriate Government
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To an Establishment as a whole.
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6. |
- Do -
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Section 17 (1C)
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Appropriate Government
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To a class of Establishment
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7. |
Exemption from the operation of Employees' Deposit Linked Insurance Scheme
'76
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Section 17 (2-A)
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Central Provident Fund Commissioner
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Regional Provident Fund Commissioner. (para28(7))
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To an Establishment as a whole
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8. |
- Do -
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Section 17 (2B) read with para28(4)
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Central Provident Fund Commissioner
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- Do -
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To a class of employees.
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9. |
- Do -
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Section 17(2B) read with para28(1)
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Regional Provident Fund Commissioner
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To an individual employee.
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Exemption from Employees' Family Pension Scheme '95 |
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Section 17 (1C) of an Act provides for grant of exemption from
the operation of Employees' Pension Scheme, 1995 . It is granted by the Appropriate
Government through a notification in the official Gazette. Exemption may be granted
to an establishment as a whole or to a class of establishments . The grant of exemption
is subject to the conditions specified by the Appropriate Government . The exemption
is granted where the establishment or the class of establishments are in enjoyment
of benefits in a nature of pensionary benefits which are at par or, are more favourable
then the benefits provided under this Scheme. |
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Exemption from the Employees' |
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Section 17 (2A) of an Act provides for grant of exemption from
the operation of Employees' Deposit Linked Insurance Scheme ,1976 . It is granted
to an establishment , where the employees are without making any separate contribution
or payment of premium , are in enjoyment of benefits in the nature of Life Insurance
whether linked to their deposits in Provident Fund or not and such benefits are
more favourable than the benefits admissible under the Insurance Scheme . It is
granted by the Central Provident Fund Commissioner by notification in the official
gazette and is subject to conditions that may be specified in the notification .
It is granted either prospectively or retrospectively .
Pending grant of exemption to an establishment relaxation order may be issued under
para-28(7) of the Employees' Deposit Linked Insurance Scheme,1976
by a Regional Provident Fund Commissioner
An establishment exempted from the operation of the Employees' Deposit Linked Insurance
Scheme ,1976 is required to submit a monthly return to the Regional Provident Fund
Commissioner .
Para-28(4) of the Scheme provides for grant of exemption by the
Central Provident Fund Commissioner to any class of employees .
Under Section 17 (2B) read with Para-28(1) of
the Employees' Deposit Linked Insurance Scheme,1976, the Regional Provident Fund
Commissioner may grant exemption from the operation of any or all of the provisions
of the Employee Deposit Linked Insurance Scheme to an employee.
The establishment shall pay inspection charges at the rate of 0.005% of the basic
wages and Dearness Allowance subject to a minimum of Re.1/- per month .
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