5 empowers that Central Government to frame, by notification in the
Official Gazette, a Scheme to be called the Employees Provident Fund Scheme, for the establishment of provident funds under the Act for employees or any class of employees. It may also specify the establishment or class or establishment to which the said Scheme shall apply. Establishment of Fund. As soon as may be after the framing of the Employees Provident Fund Scheme, there shall be establishment Employees Provident Fund in Accordance with the provisions of the Act and the Employees Provident Fund Scheme [Sec. 5 (1)]. The fund shall vest in, and be administered by, the Central Board constituted under Sec. 5-A. Any of the provision of the Employees Provident Fund Scheme shall take effect either prospectively or retrospectively on such date as may be specified in this behalf in the Scheme [Sec. 5(2)]. The scheme may provide for all or any of the matters specified in Schedule II. The Employees Provident Fund Scheme applies to all factories and other establishments to which the Act applies or is applied under Sec. 1 (3), 1 (4) and Sec. 3. The applicability of the Scheme is subject to the provisions in the Act in Sec. 16 (exempting from its purview certain establishment) and in Sec. 17 (giving power to the appropriate Government to exempt certain establishments). Contributions (Sec. 6). The principal duty is laid upon the employer to put the Employees Provident Fund and Family Pension Schemes into operation and to make contributions of both their and employees share to the Funds and to deduct from the wages of the employees their share. Statutory rate of contribution. The statutory rate of contribution both from members of the Provident Fund and the employer originally was 6-1/4 per cent of basis wages, dearness allowance including the cash value of any food concession allowed to the employees and retaining allowance (if any). By an amendment of the Act the statutory rate was raised to 8-1/3 per cent on January 1, 1963 in respect of certain establishment or class of establishments which the Central Government after making the necessary inquiry, by notification in the Official Gazette, specified.
Now the rate of contribution to Provident Fund in all industries and
establishments has been increased from 8. 33 per to 10 per cent with effect from 1 st March 1997, for both employers and employees, in scheduled industries, the rate of contribution will be raised to 12 per cent. The provisions of Sec. 6 are as follows: The employers contribution to the Employees Provident Fund shall be 10 per cent of the basis wages, dearness allowance and retaining allowance (if any), for the time being payable to each of the employees. The employees may have been employed by him directly or by or through a contractor. The employees contribution shall be equal to the contribution payable by the employer in respect of him. If any employee so desires, his contribution may be an amount exceeding 10 per cent of his basis wages, dearness allowance and retaining allowance (if any), subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under Sec. 6 Substitution of 12 per cent for 10 per cent in Sec. 6. In its application to any establishment or class or establishments which the Central Government after making such inquiry as it deems fit, may by notification in the Official Gazette specify, Sec. 6 shall be subject to the modification that for the words 10 per cent, at both the places where they occur, the words 12 per cent shall be substituted. Dearness allowance. Dearness allowance is deemed to include also the cash value of any food concession allowed to the employee. Retaining allowance. Retaining allowance means an allowance payable for the time being to an employee of any factory or other establishment during any period in which the establishment is not working, for retaining his service. The Act comes into operation by its own vigour and its operation is not depended on any decision being taken by the authorities under the Act. The employers are under a legal obligation to deposit their share of contributions to the Employees Provident Fund within the time prescribed, the moment The Employees Provident Fund Scheme became applicable to them, as no intimation of notice of any kind in that respect was necessary to be issued by the authorities.
Calculation. The contributions shall be calculated on the basis of wages and
dearness allowance (including the cash value of any food concession) and retaining allowance (if any), actually drawn during the whole month whether paid on daily, weekly, fortnightly or monthly basis . Where the amount of any contribution payable under the Act involves a fraction of a rupee, the Employees Provident Fund Scheme may provide for the rounding off of such fraction to the nearest rupee, half of a rupee or quarter of a rupee.