Employees Provident Fund Scheme 1952 - Explore the Basics

Posted On : October 20, 2022
Employees Provident Fund Scheme 1952 - Explore the Basics
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Once a person starts earning, there is less present and more future in their eyes. There are a lot of plans regarding the expenditure of this amount safeguarding the interests of old parents, owning a car, future investments, etc. One such thought is post-retirement life which carries the burden of uncertainty of life. The Employee Provident Fund Scheme 1952 serves this purpose to put an end to uncertainty over after-life or post-retirement doubts confined to finances. It allows employees to contribute for their own pension, while the employer also helps. However, the benefit does not confine itself to the employee’s retirement. One can withdraw some parts in case of emergencies. Even in case of untimely death of the employee, the EPF scheme serves as a life insurance for the loved ones of such deceased employees. Know in detail about such an amazing scheme under the Employees Provident Fund and Miscellaneous Provisions Act, 1952.

What is the Employees Provident Fund Scheme 1952?

The Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 is a social welfare scheme brought into force for the benefit of employees. Employees’ Provident Fund Scheme, 1952 hits three birds with one stone, namely:

  • Provident Fund as accumulating savings;
  • Post-retirement pension; and
  • Life insurance for family in case of employee’s untimely death.


The EPF Scheme 1952 is administered under the Central Board of Trustees and Employee Provident Fund Organisation (EPFO) by the Ministry of Labour and Employment, Government of India. The scheme requires monetary contributions from employers and employees. However, the amount is deposited in PF accounts by the employers only. The concerned employee is entitled to the accumulated sum after a certain period in case of exigency, and the whole after maturity/ retirement from services.  


Applicability of EPF Act 1952

The Employees Provident Fund and Miscellaneous Provisions Act, 1952 is applicable to the following organisations across India covered under Schedule 1 of the Act:

  • Factory where 20 or more persons are employed;
  • Establishment where 20 or more persons are employed;
  • Theatres with 5 or more employees;
  • Any other Establishment with less than 20 employees notified by the Central Government;
  • Indian employees working in India and abroad (Country with Reciprocal Social Security Agreement);
  • Foreign citizens employed in India.

Even if a company already registered under the EPF Act, 1952 has employed less than 20 employees for the time being, the Employees provident Fund Scheme 1952 rules still apply.

Who is Eligible for Employees’ Provident Fund Scheme?

  • Employees earning a salary of Rs 15,000 or less (Basic + Dearness Allowance) have to mandatorily contribute to EPF Scheme 1952. Hence, it becomes one among the basic rights of employees in India.
  • Employees earning a salary of Rs 15,000 (Basic + DA) or above have the option to or not to become a member of Employees’ Provident Fund Scheme, 1952.

Employee Provident Fund Scheme 1952 Rules

  • Employers falling under the category which the Employees Provident Fund and Miscellaneous Provisions Act, 1952 is applicable to need to register with the Provident Fund Office.
  • The employer needs following documents during registration:

-         PF Registration Form

-         Article of Association (AOR) or Memorandum of Association (MoA)

-         List of Directors/ Partners/ Promoters

-         Name of Banker which employer’s business is registered with

-         Rent receipt, sales documents with balance sheet

-         Income Tax Details

-         Licence of Shops/ Business, if applicable

-         Details and salary sheet of total employees (PF mandatory and PF exempted employees)

  • Employees falling under the mandatory ambit of EPF Act 1952 or optional basis need to register under the scheme.
  • Employer and Employee both contribute a certain percentage of amount to employees provident fund.
  • The amount is calculated on PF wages, i.e. the sum of basic salary and dearness allowance.
  • Although the minimum percentage of contribution is fixed on part of the employee, one may opt for contributing higher as there is no upper bar for Employees Provident Fund Scheme 1952.
  • Premature withdrawal of benefits under EPF scheme 1952 includes only employee’s contribution in case of early employment years.
  • Withdrawal of PF amount includes both employer and employee’s contribution after expiry of 5 years.
  • In case of maturity, employees’ provident funds are obtained one time in huge amounts without any taxes.
  • In case a person is having trouble in withdrawing or obtaining the EPF, labour lawyers may bring judicial recourse into action for such wronged employees.

Benefits of Employees Provident Fund Scheme 1952


  •  Tax-Free: Savings under the EPF Scheme 1952 are absolutely tax free.
  • Interest: Beneficiaries of Provident Fund schemes also get to enjoy a particular amount of interest over the PF amounts after a certain period as set by the concerned authorities.
  • Post-Retirement Benefits: The objective behind Employees’ Provident Fund Scheme, 1952 Rules achieves benefits for employees after retirement from employment. There is a condition that the person must have completed service of at least 10 years under Employees Pension Scheme.
  • Emergency Access: One does not need to wait till retirement as EPF scheme allows using partial funds in case of emergency like marriage, death, education, etc.
  • Loss of Income: In case an employee loses his/ her employment/ source of income for more than 2 months, Employees Provident Fund Scheme 1952 comes to rescue.
  • Insurance for Life: In case of untimely death of the employee, the EPF funds can be obtained by the family of the deceased under the Employees Deposit Link Insurance. It eventually becomes a life insurance amount for such employees as a financial security for his/ her loved ones.
  • Universal Access: Just like a PAN card number, the EPF account is also universal and does not need to follow a repeated open-close process in case of change in employment. Once an account is opened, the Employees Provident Fund and Miscellaneous Provisions Act, 1952 is applicable to all further employment of such employees. 
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