Payroll and Compliance The Monthly Chronicle

Payroll and Compliance The Monthly Chronicle - June, 2017

******* Form 16 due date extended for FY 2016-17

As per Rule 31 of the Income Tax Act, the due date for Form 16 (certificate for TDS deduction on salary) was 31st May 2017.

This year, the government has extended the TDS return (24Q) filing due date to 31st May 2017, thus making 31st the due date for TDS return filing as well as Form 16. To avoid any hardship and to enable hassle-free TDS return and Form 16 procedure, the government has extended the due date for FORM 16 issuance to 15th June 2017 (on 2nd June 2017 through gazette notification N0. G.S.R. 546(E)).

From FY 2016-17 onwards, the due date for issuing Form 16 would be 15th June.

Please find the notification for your information and reference: http://egazette.nic.in/WriteReadData/2017/176436.pdf

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Employee Provident Fund (EPF) Interest Rates for FY 2017-18 Declared

The EPFO has announced the interest rate applicable on employee-employer provident fund contribution (EPF) for the financial year 2017-18.

The EPF interest rate has changed from 8.80% (FY 2016-17) to 8.65% (current year). In this financial year (2017-2018), the subscribers of EPFO will get a marginally lower return than they have in the past few years.

Amendment in Advance Claim of Provident Fund (PF)

Earlier, advance withdrawal of PF balance could be made under Para 68J (Advance for Illness) and Para 68N (Advance for Handicap Support Equipment) only after providing a certificate from a doctor along with employer approval. There were no other documents or details required. Under the EPF (Fifth Amendment) Scheme, 2017, Para 68J (Advance for Illness) and Para 68N (Advance for Handicap Support Equipment) have been amended. A new policy has been introduced wherein members can claim or opt for advance after providing a self-declaration. The said change is applicable from 25th April, 2017.

Under the amended Clause 68J and 68N of the Employees Provident Fund Scheme 1952, a member can file for non-refundable advances from his/her PF account for the treatment of illness, buying equipment, etc. (activities that minimize hardships on account of the handicap). Following this amendment, subscribers can now seek fund withdrawal from their Employee Provident Fund (EPF) account on various grounds by using a Composite Form along with a Self-Declaration.

Withdrawal of Provident Fund (PF) for Housing Purpose

During Budget 2017, Prime Minister Shri Narendra Modi launched the scheme of ‘Housing for All by 2022’, wherein the government will make available affordable housing for everyone. To take the initiative further, the EPFO (through Gazette Notification No. G.S.R. 351(E) dated 12th April, 2017) has inserted a new clause (Para 68 BD(3)) under the PF withdrawal scheme. The new clause allows withdrawal of PF balance to facilitate the housing needs of workers. As per the new rules, in cases where members do not have the capacity to borrow the requisite funds from banks (or other prime lending housing finance companies, etc.), they can file for withdrawal of their PF balance.

Also, in addition to the lump-sum withdrawal of up to 90% of accumulated provident fund account balance, the member may opt for full/part repayment of loans out of monthly PF contributions. For enabling this repayment scheme, the member needs to submit a certificate containing details of Provident Fund contributions deposited in the member’s account for three previous months to banks or prime lending institutions to arrive at equated monthly installments for withdrawal under Para 68 BD(3).

Introduction of Real Time Monitoring System of PF Remittances

After the introduction of UAN (version 2.0) and ECR (Version 2.0) under EPFO, policies and procedures of all PF remittances have been made more stringent. These PF remittances now need to be made through the Online Unified Portal system only. These online systems and procedures make it possible for real-time monitoring of remittances of PF contributions by establishments. With all these systems in place, establishments/employers are advised to make timely remittances.

In case of default of remittance of funds, the following action would be taken:

An SMS alert shall be sent by CAIU of IS Division on 16th/17th of every month to those employers who have made at least one contribution during the last three months but failed to contribute during the month, informing them of the due date for payment and advising them to pay EPF and other contributions to avoid damages and interest for late payment.
Thereafter, an e-mail communication shall be sent between the 20th- 25th of every month.
The list of establishments, who have failed to remit their contributions by the relevant month, shall be prepared and supplied to all the field offices (via protected view in MIS Portal).

There are further proposals being considered to publish the list of defaulting establishments in the EPFO website for public view.

New scheme launched under ESIC

The Ministry of Labour and Employment on the International Labour day (1st May 2017) introduced two new schemes for labour welfare on International Labour day (1st May 2017). The new schemes are: ‘Aadhaar-Based Online Claim Submission’ and ‘One IP-Two Dispensaries’.. 1. Aadhaar - Based Online Claim Submission scheme: EPF Members who have activated their UAN and seeded their KYC (Aadhaar) with EPFO will now under this scheme be able to apply for PF final settlement (Form19), Pension withdrawal benefit (Form10-C) and PF part withdrawal (Form31) from the their UAN Interface directly.

2. One IP (Individual Person) - Two Dispensaries: Earlier, under the ESIC policy, only one dispensary was to be enrolled, wherein the Individual Person and his or her family were eligible for medical treatment. In cases where workers were working in other states, their families were deprived of medical due to non-availability of the option of a second dispensary (for dependent members of the worker’s family). Thus, by introducing the concept of ‘One IP-Two Dispensaries’, the Individual Person as well as family members will be able to avail treatment from either of the dispensaries and, in case of emergencies, from any ESI Institution.

Compliance Calendar for the month of June, 2017 Due date Nature of transaction Existing rules Mode Professional Tax - States - Remittances 10th June 17 Andhra Pradesh & Madhya Pradesh State-wise regulations By Challan 15th June 17 Gujarat Gujarat PT regulations By Challan 20th June 17 Karnataka Karnataka PT regulations By Challan & Online 21st June 17 West Bengal West Bengal PT regulations By Challan 30th June 17 Assam & Orissa State-wise regulations By Challan 30th June 17 Maharashtra Maharashtra PT regulations Online PF Central 15th June 17 Remittance of Contribution EPF & MP Act, 1952 Online ESI Central 21st June 17 Remittance of Contribution (Main code and Sub codes) ESIC Act, 1948 Online TDS 7th June 17 TDS Payment Income Tax Act, 1961 Online 15th June 17 Form 16 Income Tax Act, 1961 Online Labour Welfare Fund Remittances 5th June 17 Kerala State wise regulations By Challan

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