Dear Friends,
Can anybody guide me on how long we should keep company accounts records for EPF Inspection? The EPF inspector comes to our office and gives a notice to show all account records like Cash Book, Ledger, Voucher, etc., since the date of the last inspection, which was on 09.01.02. Therefore, we have to show the records from the last 10 years.
Is there any provision to avoid showing records for such a long period? Any circular, etc., that addresses this issue? Please share with me if any.
Tapas Ghosh
CM Flowmeters (India) Pvt. Ltd. / Kolkata
From India, Calcutta
Acknowledge(0)
Amend(0)
3Can anybody guide me on how long we should keep company accounts records for EPF Inspection? The EPF inspector comes to our office and gives a notice to show all account records like Cash Book, Ledger, Voucher, etc., since the date of the last inspection, which was on 09.01.02. Therefore, we have to show the records from the last 10 years.
Is there any provision to avoid showing records for such a long period? Any circular, etc., that addresses this issue? Please share with me if any.
Tapas Ghosh
CM Flowmeters (India) Pvt. Ltd. / Kolkata
From India, Calcutta
Acknowledge(0)Amend(0)
There is no time limit in PF ACT to keep the records. As per Income Tax act, you need to Keep 10 year records. Therefore you can not avoid to show them the records. regards Manjay
From India, Delhi
Acknowledge(0)Amend(0)
From India, Delhi
Acknowledge(0)Amend(0)
Dear,
I disagree with the Income Tax record limitation for 10 years. In accordance with the statutory provisions stipulated in the Income Tax Act of 1961, records are kept for five years. As far as the question of PF records is concerned, there is no specified tenure to keep the records. For inspection purposes, you can ask the inspecting authority about the reasons for conducting PF inspections. Currently, such inspections are carried out only for defaulting employers who have not deposited monthly contributions within the set time limit and where membership has drastically decreased. Regarding deposits for the past 10 years as a revenue matter, you are not obliged to produce book of accounts for a 10-year period; they cannot impose this requirement on you.
Regards,
R B Yadav
Advocate
From India, Gurugram
Acknowledge(0)Amend(0)
I disagree with the Income Tax record limitation for 10 years. In accordance with the statutory provisions stipulated in the Income Tax Act of 1961, records are kept for five years. As far as the question of PF records is concerned, there is no specified tenure to keep the records. For inspection purposes, you can ask the inspecting authority about the reasons for conducting PF inspections. Currently, such inspections are carried out only for defaulting employers who have not deposited monthly contributions within the set time limit and where membership has drastically decreased. Regarding deposits for the past 10 years as a revenue matter, you are not obliged to produce book of accounts for a 10-year period; they cannot impose this requirement on you.
Regards,
R B Yadav
Advocate
From India, Gurugram
Acknowledge(0)Amend(0)
Dear Sir,
Thank you for your response. You mentioned a provision in the Income Tax Act for keeping records for five years. Could you please provide us with the relevant circular reference and the effective date of this provision? We would like to present this to the inspector as the reason for not maintaining records beyond five years.
Regards,
Tapas Ghosh
From India, Calcutta
Acknowledge(0)Amend(0)
Thank you for your response. You mentioned a provision in the Income Tax Act for keeping records for five years. Could you please provide us with the relevant circular reference and the effective date of this provision? We would like to present this to the inspector as the reason for not maintaining records beyond five years.
Regards,
Tapas Ghosh
From India, Calcutta
Acknowledge(0)Amend(0)
Dear Sir,
You need to maintain the records for life long. It is possible that an employee has been working with your firm for the last 10 or 15 years. However, for inspection purposes, you only need to show records for the last 7 years. This is in accordance with the circular by EPFO. Currently, I do not have a copy of the same, but I will search for it and post it here. You can also search for the circular on citeHR as I have downloaded it from there.
Regards,
Vallabh
From India, Mumbai
Acknowledge(0)Amend(0)
You need to maintain the records for life long. It is possible that an employee has been working with your firm for the last 10 or 15 years. However, for inspection purposes, you only need to show records for the last 7 years. This is in accordance with the circular by EPFO. Currently, I do not have a copy of the same, but I will search for it and post it here. You can also search for the circular on citeHR as I have downloaded it from there.
Regards,
Vallabh
From India, Mumbai
Acknowledge(0)Amend(0)
Dear,
The inspection policy of the EPFO is available on their website; you can download it from there. As far as the question of income tax record-keeping is concerned, it is five years, and the copy of the notification can be found on the income tax website in the archive items. Furthermore, last year, the ESI Corporation also issued a notification to this effect, and the same is available on the website.
Thanks & Regards,
R B Yadav
Advocate
From India, Gurugram
Acknowledge(0)Amend(0)
The inspection policy of the EPFO is available on their website; you can download it from there. As far as the question of income tax record-keeping is concerned, it is five years, and the copy of the notification can be found on the income tax website in the archive items. Furthermore, last year, the ESI Corporation also issued a notification to this effect, and the same is available on the website.
Thanks & Regards,
R B Yadav
Advocate
From India, Gurugram
Acknowledge(0)Amend(0)
I would rather advise for the production of whatever records you have from a particular period and provide in writing that:
1. No records prior to this period are in your possession, as they belong to an older period and are voluminous.
2. You are prepared to settle any liability, if raised in the future due to complaints filed by former employees at any stage.
3. You may formally request a copy of any complaint currently held by the RPFC for your verification and response.
Chandok AK
RPFC (Retd.)
From India, Chandigarh
Acknowledge(0)Amend(0)
1. No records prior to this period are in your possession, as they belong to an older period and are voluminous.
2. You are prepared to settle any liability, if raised in the future due to complaints filed by former employees at any stage.
3. You may formally request a copy of any complaint currently held by the RPFC for your verification and response.
Chandok AK
RPFC (Retd.)
From India, Chandigarh
Acknowledge(0)Amend(0)
Dear Mr. Tapas,
Re: your query on how long to keep the records.
You can keep the payment challans and other related payment records for a period of 7 years. Since you are in the electronic age, you can scan and store the documents in digital format. This will be especially beneficial in the long run during the settlement process, particularly in relation to Form-5, Form-10, Form-2, and your company's registered records.
I hope that the respected members will also agree with this approach.
Regards,
Ravi
Retd. Sr. HR & Comml. Exe.
From India, Mumbai
Acknowledge(0)Amend(0)
Re: your query on how long to keep the records.
You can keep the payment challans and other related payment records for a period of 7 years. Since you are in the electronic age, you can scan and store the documents in digital format. This will be especially beneficial in the long run during the settlement process, particularly in relation to Form-5, Form-10, Form-2, and your company's registered records.
I hope that the respected members will also agree with this approach.
Regards,
Ravi
Retd. Sr. HR & Comml. Exe.
From India, Mumbai
Acknowledge(0)Amend(0)
Company law requires you to maintain all accounting records for a period of 8 years from the end of the financial year. It requires accounting records but not the supporting working or computation beyond that is necessary beyond identification of the transaction. Most companies follow the rules of keeping the record for 8 years.
Most labor laws require you to keep records for 3 years (Payment of Wages Act, Minimum Wages Act, etc).
So in effect, if the inspector asks for the record, you can show him accounting records like payment vouchers and copies of challans. However, wage registers, etc., are going to be available for only 3 years. So, he can really speak, check for 3 years.
Why did you allow the matter to go to a show cause level? Why did you not show him current and 3 years records when he came first? It would have been simpler, unless you have things to hide. Now, I don't know how acrimonious you have made the situation. If possible, give him a reply to the show cause offering to show records for 3 years and that you do not have older records. Further, speak to him and convince him that nothing wrong has been done and that he can check 3 years records. If he finds any difference, then he can always ask for other records. You can also find out what is wrong and why he is conducting an investigation.
From India, Mumbai
Acknowledge(0)Amend(0)
Most labor laws require you to keep records for 3 years (Payment of Wages Act, Minimum Wages Act, etc).
So in effect, if the inspector asks for the record, you can show him accounting records like payment vouchers and copies of challans. However, wage registers, etc., are going to be available for only 3 years. So, he can really speak, check for 3 years.
Why did you allow the matter to go to a show cause level? Why did you not show him current and 3 years records when he came first? It would have been simpler, unless you have things to hide. Now, I don't know how acrimonious you have made the situation. If possible, give him a reply to the show cause offering to show records for 3 years and that you do not have older records. Further, speak to him and convince him that nothing wrong has been done and that he can check 3 years records. If he finds any difference, then he can always ask for other records. You can also find out what is wrong and why he is conducting an investigation.
From India, Mumbai
Acknowledge(0)Amend(0)
All members,
In keeping view of the laws for keeping records, it is better to maintain a record-keeping policy that is prepared and approved by seniors to avoid ambiguity at a later stage. This will make it easier to provide clarification to the authorities.
From India, Visakhapatnam
Acknowledge(0)Amend(0)
In keeping view of the laws for keeping records, it is better to maintain a record-keeping policy that is prepared and approved by seniors to avoid ambiguity at a later stage. This will make it easier to provide clarification to the authorities.
From India, Visakhapatnam
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.