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Exemptions

 

Types of Exemption

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:

a. Exemption from the Act ( Including the Schemes ), under Section -16 (2) of the Act.
b.Exemption from the operation of the Scheme(s) viz. Employees' Provident Fund Scheme / Employees' Pension Scheme /Employees' Deposit Linked Insurance Schemes.

(a) Exemption from the Act ( Including the Schemes ) :

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:

a .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.

b. Voluntary organisations engaged in leprosy eradication programmes.

(b) Exemption from the operation of the Scheme(s) viz. Employees' Provident Fund Scheme / Employees' Pension Scheme /Employees' Deposit Linked Insurance Schemes:

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:

a. To an establishment as a whole.

b. To an individual employee ( under the Employees' Provident Fund & Employees' Deposit Linked Insurance Scheme only )

c. To a class of employees.

Issue of Relaxation order under the Employees' Provident Fund & Employees' Deposit Linked Insurance Schemes :

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:

a. Submit the returns required to be submitted under the Scheme.

b. Remit the dues to the Fund

c. Transfer the accumulations from the existing Fund to the C.B.T., Employees' Provident Fund.

The Regional Provident Fund Commissioner / Central Provident Fund Commissioner may also impose certain other conditions on maintenance of accounts, enrolment of members, Investment of monies, payment of inspection charges and submission of returns etc., in the Relaxation Order. For all practical purposes the establishment under Relaxation Order shall be treated on par with the establishment granted exemption. The Relaxation Order is issued under para 28(7) of the Employees' Deposit Linked Insurance Scheme.

Exemption from the operation of Employees' Provident Fund Scheme , 1952:

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.

Exemption under Section 17 (1)(a):

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.

Exemption under Section 17(1)(b):

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.

Payment of Inspection charges :

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.

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.

Exemption of a Class of Employees : ( Employees' Provident Fund Scheme ,52 )

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.

Exemption- Provision of Act / Scheme-At a glance

S.No. Nature of Exemption Granted under Act/Scheme Authority to grant exemption Authority to issue Relaxation Order Remarks
1 Exemption from the Act Section 16(2) of the Act Central Government N.A. Exemption to a class of Establishment only for a specified period.
2 Exemption from the operation of Employees' Provident Fund Scheme'52 Section 17(1)(a) or 17(1)(b) Appropriate Government Regional Provident Fund Commissioner. (para79) Exemption to an Establishment as a whole.
3 - Do - Section 17(2) read with para 27-A of Employees' Provident Fund Scheme Appropriate Government Regional Provident Fund Commissioner. (para 79) To a class of employees.
4 - Do - Section 17(2) read with para 27 of Employees' Provident Fund Scheme Regional Provident Fund Commissioner To an individual employee.
5 Exemption from the operation of the Employees' Pension Scheme '95 Section 17 (1C) Appropriate Government To an Establishment as a whole.
6 - Do - Section 17 (1C) Appropriate Government To a class of Establishment
7 Exemption from the operation of Employees' Deposit Linked Insurance Scheme '76 Section 17 (2-A) Central Provident Fund Commissioner Regional Provident Fund Commissioner. (para28(7) To an Establishment as a whole
8 - Do - Section 17 (2B) read with para28(4) Central Provident Fund Commissioner - Do - To a class of employees.
9 - Do - Section 17(2B) read with para28(1) Regional Provident Fund Commissioner To an individual employee.

Exemption from Employees' Family Pension Scheme '95

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.

Exemption from the Employees'
Deposit Linked Insurance Scheme '76 :

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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