TalEzine March '18

Compliance Calendar for March, 2018

Due Date States Existing rules Mode
10th March '18 Andhra Pradesh,Telangana & Madhya Pradesh State-wise regulations By Challan
15th March '18 Gujarat Gujarat PT regulations By Challan
20th March '18 Karnataka Karnataka PT regulations By Challan & online
15th March '18 West Bengal West Bengal PT regulations By Challan
28th March '18 Assam & Orissa State-wise regulations By Challan
28st March '18 Maharashtra Maharashtra PT regulations Online
31st March '18 Tamilnadu & Kerala State-wise regulations Online
PF Central
15th March '18 Remittance of Contribution Epf & MP Act, 1952 Online
ESI Central
15th March '18 Remittance of Contribution (Main code and Sub codes) ESIC Act, 1948 Online
TDS
7th March '18 TDS Payment Income Tax Act, 1961 Online
Labour Welfare Fund Remittances
5th March '18 Kerala (Labour Welfare Fund Act) Kerala State Labour Welfare Fund Online

Proposed Amendments

Wage Definition

The Secretary to the Govt. OF India proposed the wages definition for the Central Labour act as list below:

  • The Employees Provident Fund and MP Act-1952

  • The Employee state insurance-1948

  • The payment of Gratuity Act -1972

    • For EPF, Gratuity and ESI with major financial ramifications

    • All remaining acts with large category of inclusions

    • Cap of 50% to avoid diversion of most of portions of wages to allowances

Views:

Since the major difference is HRA, which is approximately 10-20% of the CTC, it is preferred that the consideration of 50% shall be reduced to 25% for the definition of wages for EPF, Gratuity and ESI.

Tamil Nadu Contract Labour (Regulation And Abolition) Rules And Enhancement Of Registration Fees And Licensing Fees

As per notification published in the Tamil Nadu Official Gazette dated 21st February 2018, the Government of Tamil Nadu has amended the Tamil Nadu Contract Labour (Regulation and Abolition) Rules, 1975.

Online payment functionality has been introduced through the portal of The Directorate of Industrial Safety and Health (https://dish.tn.gov.in/) for the benefit of the users to make payment towards Registration and License

Validity of the license has been extended for a period of two consecutive calendar years commencing from the year in which the license is granted or renewed which was earlier valid up to 31st December of the year for which the license is granted or renewed

The fees towards registration, renewal and amendment of license has been revised

Employees Deposit linked insurance (EDLI) Amendment Scheme 2018

New Calculation of EDLI w.e.f.15/02/2018 in case of death of PF member; the average monthly wages drawn (subject to a maximum of INR 1.5 Lakhs), during the 12 months preceding the month in which he died, multiplied by 30 times plus 50% of the average balance in the account of the deceased in the Fund whichever is less subject to a ceiling of INR 1.5 Lakhs.

Provided that the assurance benefit shall not be less than INR 2.5 lakhs: Provided further that the assurance benefit shall not exceed INR 6 Lakhs.

Example: Employee DOJ: 01/01/2018, DOD: 20/02/2018, PF salary: INR 10,000/-

EPF Deduction: INR 10,000 / 26(working days) x 18 Present Days = INR 6923/-,

PF contribution @12% INR 831 + Employer share towards EPF @3.67% =INR 254 + EPS @8.33% = INR 577,

Total EPF Balance = INR 1085 + Int.

EDLI calculation: INR 10,000 x 30 = INR 3 Lakhs + 50% of EPF balance i.e. INR 543/-.

EDLI Benefits would be INR 3,00,543/- + Pension to widow and child up to 02 children of age up to 25 years + EPF balance. Please refer the copy of notification for more details.

PF related Updates

PF claims submitted through Online for More than 10 lakhs

In case the amount of claim settlement is above Rs.10.00 lakhs for PF claims and Rs.5.00 lakhs in respect of the EPS withdrawal claims, the claim form must be accepted through online mode only. The bank account of such PF members should have been seeded and verified in the system before settling such claims. Accordingly, all claims exceeding the above limits should not be accepted in the physical form.

EPFO coverage for Indians working abroad too: CPFC

Indians working abroad can now exempt themselves from their host country's social security scheme and get covered by retirement fund body EPFO stated by Central Provident Fund Commissioner (CPFC) V.P. Joy.

An online facility to avail the benefit has been made functional. The scheme allows Indian employees the option of not being part of their host country's social security scheme and saves employers from double social security contributions.

The scheme is of great help for Indian workers going overseas for a limited period of time, The biggest benefit they get from opting for the CoC is that their money is not blocked for a long time in the host country.

EPFO Goes Paperless

EPFO has proposed to have a campaign for going paper-free during the next two months, namely March and April 2018

The Employees’ Provident Fund Organisation (EPFO) will be free from paper. The organization has set an outer deadline of August 15, 2018, to be paper-free with a parallel expansion of its name EPFO as ‘Electronic Paper Free Organisation’. “EPFO has set a target of transformation to an electronic paper free organization by August 15, 2018. Various administrative and technical initiatives have already been implemented to achieve this target,”

Central Provident Fund Commissioner (CPFC), V P Joy has written to his field offices. In fact, he has said that the organization will try and achieve the paper-free target within the next two months.

PF withdrawal after you quit job: important income tax ruling you need to know

Accumulated balance of an EPF account only up to the date of leaving employment will be exempt from income tax, says a tax expert. Many people continue to maintain their EPF or Employee Provident Fund accounts even after they cease to be in jobs. They are no longer in jobs but EPF accounts continue to earn interest. EPFO or Employees' Provident Fund Organization had last year rolled back its decision on inoperative EPF Accounts or those that have been not accruing contribution for more than 3 years. So now even if your account is lying inoperative for more than 3 years, it will continue to earn interest in the same manner did earlier.

EPFO reduces administrative charges to 0.5%

Central Board of Trustees (CBT) of EPFO has proposed that administrative charges will be reduced to 0.50% from existing 0.65%. Hence the employer share will be 13% instead of existing 13.15% 12% of Employer share will be paying by the Government of India under the PMRPY scheme for next 03 years in respect of new employees who is having No previous PF membership and Gross salary to be less than 15000/- Accordingly, Employer share for new employees will become 1% only

Important Judgments

On Compliance of Transfer Order By An Employee - His Name Can Be Struckoff from the Rolls

When the workman is in transferable posts and, therefore, they were under an obligation to serve the appellant-company at different places at which they might be transferred in the exigencies of service. The workmen just forgetting this obligation cast on them under the Certified Standing Orders and without any valid justification ignored the transfer orders and did not go and report for duty at the transferred placed, in spite of reminder. Therefore, from the cumulatively established facts with regard to the conduct of the four workmen concerned, it has to be held that the appellant- company was justified in drawing the inference that the workmen had abandoned the service of the appellant-company and thereby forfeited their appointments.

Reference:

Management of Continental Construction Ltd.vs Workmen of Continental Construction Ltd., 2003 LLR 898 (Karn. HC).

Notes to Note:

Principal employer is liable to pay EPF contributions if the contractors fail to remit the same in respect of laborers engaged through contractors.

If a party fails to participate in proceedings conducted under Section 7-A of the Act, despite opportunities granted by the EPF Authority, passing of an immediate emergency order against such a party is justified.

When the conveyance allowance paid is in the nature of travelling allowance to enable the employees to settle a part of cost incurred on a travel, by them, from their place of residence to workplace and back, is not to be covered under the term ‘wages’ envisaged in section 2 (22) of the Employees' State Insurance Act, 1948.

When the conveyance is not covered under the term ‘wages' as defined under the Act, it is exempted from ESI contributions.