Nov-16 content 2

Payroll and Compliance The Monthly Chronicle - November, 2016 Share us on           var switchTo5x=true;stLight.options({publisher: "a774d07d-a09d-4a2f-a103-57088fe922e2", doNotHash: false, doNotCopy: false, hashAddressBar: false, tracking: false});


The next version of Universal Account Number (UAN 2.0)

The Employees’ Provident Fund Organization (EPFO) is in the process of implementing the next version of UAN, whereby the Universal Account Number of an EPF member is to be obtained/linked with their present employer before filing the Electronic Challan cum Return (ECR).

Currently, employers declare about new joiners, and obtain new UANs or link their existing UANs (based on whether they are first-time employed or have an existing EPF membership) to relevant PF accounts.

This whole process of UAN allotment and/or linking happens after the Electronic Challan cum Return (ECR) is submitted by the employer.

The system then automatically compares the new member ids in the present ECR with the earlier ECR and then pushes new employee details to the employer for verification.

The EPFO has released an internal communication in connection with UAN on 27th October 2016 changing the UAN generation and linkage process. The process of filing ECR is revised under the new version of UAN 2.0. Under this new version, the UAN would be allotted upfront and consequently, the ECR can only be filed for employees with UAN numbers.

Thus all employers are informed to complete the pending tasks of declaring about the first time employment of any member within their organization and ‘obtain the UAN’ or ‘link the UAN’ or ‘previous member ID’ for new employees that have a previous EPF membership –

ON or BEFORE the 15th of November, 2016

In case the UAN has not been generated by then, the employer would not be able to transfer the PF amount to the respective employee from the 15th of November, 2016.

Some key features of the UAN 2.0 version are:

  1. UAN would become an important field in Electronic Challan cum Return (ECR)
  2. For members joining EPF for the first time, the UAN should be obtained by the employer prior to filing ECR. (Note : The new UAN can be obtained through the online UAN portal)
  3. The employer should furnish and approve member's KYC details, i.e. Aadhaar, PAN, Bank Account etc. to avoid issues in future.
  4. In instances where the new joiners already have an existing UAN number, then the linking of the same to their current PF account should be done before filing ECR. (Note : Generation/Linking of UAN can be done through online UAN portal)
  5. The employer may start remitting dues through ECR for all linked UAN thereafter.

To read more: Click here

SMS notifications for quarterly TDS on salaries

The government of India has initiated a new scheme wherein the Income Tax department will directly communicate to salaried taxpayers through SMS alerts on their registered mobile numbers, informing them about the tax deducted at the end of every quarter.

Similarly, the government of India will send SMS alerts to deductors who have either failed to deposit taxes deducted or to e-file their TDS returns by the due date. To start off, the benefit of this scheme would be available for approximately 2.5 crore salaried people.

The Central Board of Direct Taxes (CBDT) will soon extend this facility to another 4.4 crore non-salaried taxpayers. The frequency of SMS alerts is expected to increase once the process for filing TDS returns is streamlined to receive such information on a real-time basis.


The Employee State Insurance Corporation (ESIC) has already implemented the AADHAR based authentication and “e-pehchan” card eligibility facility with effect from 1st February, 2016 to all its members. The ESIC is now promoting the use of Aadhaar number for identification of individuals and their family members for availing medical services.

Employers are expected to link the AADHAR number of individual employees and their respective dependents into the ESIC database in order for the employee to claim and avail all (eligible) medical for themselves and their respective families.

You may find a separate counter set up at each ESIC/ESIS hospitals to facilitate the seeding of AADHAR numbers with the e-pehchan cards.

Provident Fund settlement at the time of retirement or death, amended

In the view to help its members, the EPFO has declared that all the death claims submitted by spouses/ nominees/legal heirs of an Employee Provident Fund (EPF) member, must be settled within a period of seven working days from the date the claim was submitted.

The EPFO declared that it is the responsibility of the respective ‘officer-in-charge’ to scrutinize the claim, request the applicants to submit all the relevant documents in one attempt and consequently release the settlement of the claim within seven working days. To facilitate this process, the government has decided to train and depute one official dedicated to look after death settlements.

To support the settlement process for members who have achieved superannuation age and to make the settlement process hassle free, the EPFO has released the following instructions:

  1. The EPFO will prepare a monthly list of retiring EPF/EPS members three months in advance and the same would be communicated to concerned members and their respective employers.
  2. The employers are requested to make payment of PF contributions one month in advance from the date of retirement.
  3. A complete set of PF and pension claim forms (that retiring employees are expected to furnish and submit) will be sent at least 14 days prior to the date of retirement, to the respective retiring employees. The officials in the Facilitation Centre at the PF office will scrutinize the claim forms and guide the claimants for submission in a single attempt.
  4. Trained personnel will be deputed in the Facilitation Centre to support the retirement cases.
  5. The PF claim settlement amount must invariably be credited to the members account on or before the date of retirement. For pension claims, a copy of Pension Payment Order shall be issued to retiring member on the date of his/her retirement.
Digitization of registers and documents

The Ministry of Labour and Employment is in the process of implementing a new scheme where all books, records and documents mandated under labour laws are to be maintained online/digitally and the same are to be integrated with the Shram Suvidha Portal of the organization.

It’s also declared by the department that “At the time of inspection or scrutiny, in case establishment maintains records and registers in electronic form and the same are assessable by the authority or inspector then the same need not be produced in hard copies.”

Employees' State Insurance Corporation (ESIC) raises wage threshold to Rs. 21,000 (Draft Notification)

The wage limit for coverage of an employee under the Employees State Insurance Act (1948) has been enhanced from Rs. 15,000 to Rs. 21,000 per month.


The government released the draft notification on the 6th October 2016 with the intention of keeping it open to address any possible objections from the public for 30 days (from 6th October, 2016).

The changes would be implemented once the government’s final notification is released. However, the effective date has still not been announced by the government.

To read more about the notification, Click here

The government proposes consolidation through new labour laws

Currently, there are 44 central labour laws in India and many other state laws attached to these central laws. To simplify these and bring parity between these laws, the government of India has proposed to bring all the 44 labour laws under four labour law codes –

  1. 1. Code on wages
  2. 2. Code on industrial relations
  1. 3. Code on working condition
  2. 4. Code on social security.

This proposal however is still said to be under discussion and therefore is open to changes.

Interest rates on saving schemes reduced

The government of India has reduced interest rates on small savings schemes (marginally) by 0.1 per cent for the October-December quarter of the Financial Year 2016-17.

The revised rates for small saving schemes are provided in the table.

Scheme Earlier Rate Revised Rates Public Provident Fund 8.1 8 Kisan Vikas Patra 7.8 7.7 Senior Citizens Savings Scheme 8.5 8 National Savings Certificate 8.5 8 Sukanya Samriddhi Account Scheme 8.6 8.5 Five-year recurring deposit 7.4 7.3 1, 2, 3, 4 and 5 year time deposits Varies based on Bank reduced by 0.1% Savings deposit 4 4 Freedom of choice in insurance options

At present, workers with monthly wages of up to Rs. 15,000 (proposed to be increased to Rs. 21,000 per month) are mandatorily covered under the health insurance scheme managed by the Employee State Insurance Corporation (ESIC). The government of India is reportedly in the process of proposing an amendment wherein, the workers covered under ESIC will soon have an option to choose from Health Insurance products available in the market in lieu of the mandatory scheme run by the ESIC.

The above amendment has been approved by the Union cabinet and subsequently be presented in the winter session of parliament for further discussion.

Compliance Calendar for the month of November, 2016 Due date Nature of transaction Existing rules Mode Professional Tax - States - Remittances 10th November 16 Andhra Pradesh & Madhya Pradesh State-wise regulations By Challan 15th November 16 Gujarat Gujarat PT regulations By Challan 20th November 16 Karnataka Karnataka PT regulations By Challan & Online 21st November 16 West Bengal West Bengal PT regulations By Challan 30th November 16 Assam & Orissa State-wise regulations By Challan 30th November 16 Maharashtra Maharashtra PT regulations Online PF Central 15th November 16 Remittance of Contribution EPF & MP Act, 1952 Online ESI Central 21st November 16 Remittance of Contribution (Main code and Sub codes) ESIC Act, 1948 Online TDS 7th November 16 TDS Payment Income Tax Act, 1961 Online Labour Welfare Fund Remittances 5th of every month Kerala (Kerala Shops & Establishment Workers Welfare Fund) Kerala State Labour Welfare Fund Offline Check out our latest blog posts Are You Ready for Unlimited Time-off?

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