Payroll and Compliance - The Monthly Chronicle

March 2018

Provident Fund Organisation to be Paperless by 15 August 2018

The Digital India campaign was launched by the Government of India on 1 July 2015 to ensure that Government services are made available to citizens electronically - by improved online infrastructure and by increasing Internet connectivity, or by making the country digitally empowered in the field of technology. Under this movement, many of the Provident Fund (PF), Professional Tax (PT), Employee State Insurance Corporation (ESIC) processes and procedures have been streamlined and made online.

The Provident Fund Organisation has proposed to go paperless by 15 August 2018.

Listed below are a few of the proactive steps taken by the government to meet their goal of having a paperless organisation:

  1. Any establishment that is in practice of submitting 50+ claims per month (including Transfer, Withdrawal, and Partial withdrawals) will have to submit only online. No physical forms would be accepted.
  2. KYC seeding to PF account would be mandatory for all subscribers. Non-seeding of KYC would be considered a prosecution offence.
  3. All notices would be issued by the department electronically. No more physical notices.
  4. In order to receive the notices correctly, employers should update Form 5A for missing details.
  5. All proceedings under section 7A, 7Q and 14B would be conducted under e-court.
  6. E-form 9 and digitisation of Form 9 is to be completed before 31 March 2018. For instructions regarding Form 9, please refer to this document (PDF).


EPFO Replaces Form 2 with E-Nomination

The EPF Form 2 is for the purpose of declaration and nomination under the Employees’ Provident Funds and Employees’ Family Pension schemes. In the form’s tabular column, one needs to fill in details of the nominee(s), such as name, address, relationship with member, age, amount to be paid to each nominee, and guardian details (in case the nominee is a minor). The form has to be signed or a thumb impression has to be made at the end of the section, and the form submitted to EPFO department.

In a new initiative, the EPFO has come out with e-nomination to replace the physical Form 2. Members can nominate through the Member portal. This new electronic process will replace all previous physical nominations.

Note: The e-nomination option is available only for subscribers whose Aadhaar details are linked into the EPFO portal. Also, similar to physical nominations, e-nominations can also be modified.

Process to generate Digital Form 2 for EPF & EPS nomination

  1. Enter the UAN portal – select Manage option – Select E-Nomination option
  2. Type the full address (as per Aadhaar) and save. Then select the Having Family option (Yes/No) as required and save the family details.
  3. Then, select the combo box for EPF nomination percentage and save EPF nomination. After that, write the EPS nomination and save the EPS nomination option.
  4. Agree to the declaration box and generate OTP option. Type the OTP which is sent to your registered mobile number and authenticate the document.
  5. Select the View option for Digital Form 2 and download the same for your documentation.

Proposed Provident Fund Deduction Rates for New Employee


There were various propositions made in the Union Budget to benefit newly employed personnel in companies, such as the Pradhan Mantri Rojgar Protsahan Yojana (PMRPY) Plan Scheme, reducing women’s contribution rate towards PF, and government paying off the employee’s share for every newly employed personnel.

To read details of proposed changes please refer to last month’s newsletter.

Based on the scheme proposed above, the PF rates and contribution from next year onwards would be as follows:
Proposed PF rates and contribution
  Up to March 2018
Proposed from April 2018
(For every new employed person for next three years)
  Male/Female Male Female
Basic Wage 10,000 10,000 10,000
Employee share 1200 (12%) 1200 (12%) 800 (8%)
Employer share 482 (4.82%) 115 (1.15%) 115 (1.15%)
Government share (PMRPY) 833 (8.33%) 1200 (12%) 1200 (12%)

EPFO Releases the Interest Rate for FY 2018-19

Retirement fund body EPFO lowered the rate of interest on employee’s provident fund to 8.55 per cent (from 8.65 per cent in the previous fiscal) for its currently enrolled 6+ crore subscribers.


Mandatory Submission of Claims through Online Mode for PF Settlement

Currently, any PF or/and EPS claim can be claimed through online or offline mode, based on the seeding of KYC details into the PF portal.
Recently, the EPFO department has provided official notification stating: For any claim settlement above Rs. 10.00 lakh for PF claims and Rs. 5.00 lakh for 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 will not be accepted in the physical form.

Compliance Calendar for the month of March, 2018
Due date Nature of transaction Existing rules Mode
Professional Tax - States - Remittances
10th March 18 Andhra Pradesh & 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
21st March 18 West Bengal West Bengal PT regulations By Challan
31th March 18 Assam & Orissa State-wise regulations By Challan
31th March 18 Maharashtra Maharashtra PT 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
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 Offline
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Sources: Government Notifications, Circulars, Press releases.


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