Newsletter April 2016

Payroll and Compliance The Monthly Chronicle - April 2016 New condition of PF withdrawal scheme effective from 1st May 2016

The EPFO department amended the EPF scheme to tighten various norms for the withdrawal of PF on 10th February, 2016. This includes the restriction of full withdrawal of PF on being unemployed for 60 days, increase in the age limit for retirement, etc.

However, on 1st April 2016, the EPFO department deferred the implementation of new norms that restrict 100% withdrawal of the provident fund by members, who are unemployed for over two months till 30th April, 2016.

Thus all PF claims that are received up to 30th April, 2016 will be settled as per the existing provisions (i.e. 100% withdrawal allowed).

****** Coverage of Banks under Provident Fund Act

The Government of India has recently issued a notice stating that the Provident Fund Act shall apply to all banks that employ 20 or more number of employees as a class of establishment in respect to those employees who are not entitled to the benefit of Contributory Provident Fund or old age pension. This includes employees who may not be entitled to such in accordance with schemes or rules that are framed by the Central Government or the State Government or by the respective banks established under the Banking Regulation Act, 1949. This was enforced from 10th February, 2016.

Establishments are required to take steps to register under the PF act in line with the amendment detailed above. The registration must be followed by UAN allotment to employees, activation of UAN, and seeding with KYC norms.

Employees Provident Fund (EPF) and Miscellaneous Provisions (MP) Act to cover contract workers

To ensure that all eligible workers are brought under the purview of the EPF & MP Act, the department has issued a set of instructions to make them PF-compliant. Based on these instructions, all agencies and contractors (to whom work is outsourced) are covered under this Act, therefore, all the personnel supplied by the agencies and contractors are eligible for PF. Relevant software applications have been developed with login options for both principal employers, where the principal employer can enter details of contractors and work order details, and contractors.

ShramSuvidha Portal adds more labor laws

‘ShramSuvidha Portal’, a unified Web portal, was launched on 16th April, 2014 to support a common registration facility on the e-biz portal. The aim of this portal is to help in administering a process of transparent and random business inspections.

The Ministry has decided to integrate 5 Labour Acts with the e-biz portal of the department so that various registrations, which are required by a unit, can be obtained through a single window. The Central Labour Acts covered in this process are:

  1. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952
  2. The Employees’ State Insurance Act, 1948
  3. The Contract Labor (Regulation & Abolition) Act, 1970
  4. The Building and Other Construction workers (Regulation of Employment & Conditions of Service) Act, 1996
  5. The Interstate Migrant Workmen (Regulation of Employment & Condition of Services) Act, 1979
  6. Mines Act 1952 ( for filing the returns under the Rules & Regulations)

This service will reduce the transaction costs of businesses and make it easy and convenient for employers/establishments to meet their obligations. Therefore, it will not only lead towards a better business environment but will also motivate the informal economy towards formalization.

KYC details seeding in UAN

The allotment of UAN has transformed the service delivery mechanism of EPFO by facilitating portability, balance enquiry, etc. The EPFO department has issued a circular making it mandatory for all employers to update KYC details of all the EPFO members in the UAN database. The UAN database should be updated with all (100%) the KYC details by 15th April, 2016. Seeding is complete in cases where the bank details are available along with either the PAN or Aadhaar number.

UAN

Small savings interest rates slashed

As announced by the Finance minister, small savings investments will now fetch lower returns starting 1st April, 2016. Justifying the sharp cuts in interest rates on small savings schemes, the Finance minister said that the country has to move to a lower interest rate regime to steer the economy towards a more efficient growth path. The revised interest rates are:

Saving Plans Old Rate Revised Rate Public Provident Fund 8.70% 8.10% Kisan Vikas Patra 8.70% 7.80% Sukanya Samriddhi Account 9.20% 8.60% Senior Citizens Savings 9.30% 8.60% Post office savings rate 4.00% 4.00% Highlights of AADHAAR Bill passed in Lok and Rajya Sabha

 

The Government introduced the Aadhaar (Targeted Delivery of Financial and Other Subsidies, Benefits and Services) Bill, 2016 and the bill was passed in the Lok Sabha on 10th March, 2016 and in the Rajya Sabha on 16th March, 2016. The Bill intends to provide a targeted delivery of subsidies and services to individuals residing in India by assigning unique identity numbers (Aadhaar numbers) to them.

The synopsis of the bill is as follows:

  1. Eligibility: Every resident shall be entitled to obtain an Aadhaar number.
  2. Information to be submitted to obtain an Aadhaar number: An individual has to submit the following details:
    • Biometric (photograph, fingerprint, iris scan)
    • Demographic (name, date of birth, address) information

  3. Use of Aadhaar number: To verify the identity of a person who is receiving a subsidy or service.
  4. Functions and composition of authority: The key functions of the Unique Identification Authority of India (UIDAI) authority include the following:
    • Specifying demographic and biometric information to be collected during enrolment
    • Assigning Aadhaar numbers to individuals
    • Authenticating Aadhaar numbers Specifying the usage of Aadhaar numbers for delivery of subsidies and services


  5. UIDAI panel: The UIDAI will consist of a chairperson, two part-time members, and a chief executive officer. The chairperson and members are required to have experience of at least ten years in matters such as technology, governance, etc.
  6. Protection of information: Biometric information such as an individual’s fingerprint, iris scan, and other biological attributes (specified in the regulations) will be used for Aadhaar enrolment and authentication only. Such information will neither be shared with anyone nor will it be displayed publicly, except for purposes specified in the regulations.
    • Cases when information may be revealed: The information collected for Aadhaar enrolment and authentication may be revealed in the following two cases: In the interest of national security
    • On the order of a court



  7. Offences and penalties: A person may be punished with imprisonment of up to three years and minimum fine of INR 10 lakh for unauthorized access to the centralized database, including revealing any information stored in it. If a requesting entity and an enrolling agency fail to comply with rules, then too they shall be punished with imprisonment of up to one year or a fine up to INR 10,000 or INR one lakh (in case of a company), or with both. No court shall take cognizance of any offence except on a complaint made by the UIDAI or a person authorized by the authority.

 

  Compliance Calendar for the month of April 2016 Due Date Nature of transaction Existing rules Mode Professional Tax - States - Remittances 10th April 16 Andhra Pradesh & Madhya Pradesh State wise regulations By Challan 15th April 16 Gujarat Gujarat PT regulations By Challan 20th April 16 Karnataka Karnataka PT regulations By Challan & Online 21st April 16 West Bengal West Bengal PT regulations By Challan 30th April 16 Assam & Orissa State wise regulations By Challan 30th April 16 Maharashtra Maharashtra PT regulations Online PF Central 15th April 16 Remittance of Contribution EPF & MP Act 1952 Online ESI Central 21st April 16 Remittance of Contribution (Main code and Sub Codes) ESIC Act 1948 Online TDS 30th April 16 TDS Payment Income Tax Act Online Labour Welfare Fund Remittances 20th April 16 Kerala State wise regulations By Challan Sources: Government Notifications, Circulars, Press releases. Share us on           var switchTo5x=true;stLight.options({publisher: "a774d07d-a09d-4a2f-a103-57088fe922e2", doNotHash: false, doNotCopy: false, hashAddressBar: false, tracking: false});

Disclaimer

The information provided herein is general and not intended as legal, regulatory, tax or accounting advice and you should obtain your own independent advice regarding the matters dealt with herein. ADP assumes no liability or responsibility for any errors or omissions in the content of this document or publication and for your use of any information provided. The information contained in this document is provided “as is” without warranty of any kind, either express or implied, including without warranties of merchantability or fitness for a particular purpose, and non-infringement. All materials contained in this are protected by copyright laws, and may not be reproduced, republished, distributed, transmitted, displayed, broadcast or otherwise exploited in any manner without the express prior written permission of ADP. ADP’s names and logos and all related trademarks and other intellectual property are the property of ADP and cannot be used without its express prior written permission.

Copyright ©2015 ADP, LLC ALL RIGHTS RESERVEDThe Newsletter is not for commercial or solicitation purposes