After a long study of Articals available on Cite-Hr & Other Sites It is concluded that the applicability of Admin charges & EDLI are as under :-
Their are Two type of Wages or can say Bufercation of Wages:-
1. Wages for EPF Contribution. (Total Wages including Higher Rates above 6500/-)
2. Wages for EDLI/EPS Contribution (Total Wages-ceiling @6500/-)
And my view point is as under :_
1. A/c No. 21 EDLI - 0.5% of Wages subject to Ceiling calculation of @6500/-
or can said on the no 2 type wages called Wages for EDLI
contribution.
2. A/c No. 22 - 0.01% --------------do----------
If above is correct is there any latest notification of department who support/clarifies it?
My base confusion is payment of EDLI charges on which total wages mention in Challan on Admin charges (A/c 02) payable or on ceiling amount upto total of @6500/-?
I need a notification/Order which shows it specifically or it mention any amendment.
From India, New Delhi
16Their are Two type of Wages or can say Bufercation of Wages:-
1. Wages for EPF Contribution. (Total Wages including Higher Rates above 6500/-)
2. Wages for EDLI/EPS Contribution (Total Wages-ceiling @6500/-)
And my view point is as under :_
1. A/c No. 21 EDLI - 0.5% of Wages subject to Ceiling calculation of @6500/-
or can said on the no 2 type wages called Wages for EDLI
contribution.
2. A/c No. 22 - 0.01% --------------do----------
If above is correct is there any latest notification of department who support/clarifies it?
My base confusion is payment of EDLI charges on which total wages mention in Challan on Admin charges (A/c 02) payable or on ceiling amount upto total of @6500/-?
I need a notification/Order which shows it specifically or it mention any amendment.
From India, New Delhi
Dear
It has already been mentioned in the principal act itself and the calculation of the EDLI Contribution is imposed on the employer and the amount of the contribution is calculated on the maximum ceiling of Rs 6500/- for EDLI @ 0.5% of the basic salary subject to maximum salary taken into consideration to this head is Rs. 6500/-.
As far as question of A/c 22 belongs it is the administration charge to be paid be the employer on administration of EDLI account and the amount is calculated in accordance with your formula subject to minimum Rs 2/- and in accordance with the wages of EDLI Account.
Regards
From India, Mumbai
It has already been mentioned in the principal act itself and the calculation of the EDLI Contribution is imposed on the employer and the amount of the contribution is calculated on the maximum ceiling of Rs 6500/- for EDLI @ 0.5% of the basic salary subject to maximum salary taken into consideration to this head is Rs. 6500/-.
As far as question of A/c 22 belongs it is the administration charge to be paid be the employer on administration of EDLI account and the amount is calculated in accordance with your formula subject to minimum Rs 2/- and in accordance with the wages of EDLI Account.
Regards
From India, Mumbai
Dear All,
While thanking Govindsinghnegi for his input, I am giving some more inputs on the exemption and it's advantages for the benefits of all, as under:
Advantages of Employees’ Deposit linked insurance Fund Scheme
Advantages to the Employer:
The premium payable by the employer is usually less than the total contribution being paid by the employer to R.P.F.C; particularly when the salary level is high and average age of the group is low.
Settlement of claim is quicker, LIC requires only the death certificate and the Claim Form from the employer.
Premium paid by the employer is treated as normal business expenses for Income-Tax purpose.
Advantage to the Employee:
Each employee is covered for a sum assured ranging between 5,000 to 2,00,000 depending upon the current salary and service put in from day one irrespective of the actual balance in the Provident Fund. Alternatively every employee/ worker can be covered for a uniform sum assured which will be decided depending upon the group size.
Accident Benefit:
Double accident benefit can be allowed to the extent of the Sum Assured for an extra Premium.
Steps to introduce the scheme:
Put up notice for the knowledge of the employees that you are going in for LIC's Scheme in lieu of EDLI.
Apply to the Regional Provident Fund Commissioner under Sec.17 (2A) of the E.P.F. and M.P. Act 1952 to exempt you from EDLI Scheme. The application should be accompanied by the prescribed requirements including the Rules of the Proposed Group Insurance scheme. Central PF Commissioner has authorized the R.P.F.C. to grant exemption from the 1st of the month in which the application for relaxation is submitted. LIC also offers necessary guidance to the employers for seeking relaxation.
Exemption from the Employees Deposit Linked Insurance Scheme, 1976
Section 17 (2A) of the Act provides for grant of exemption from the operation of Employees Deposit Linked Insurance Scheme, 1976. It is granted to an establishment, where the employees are, without making any separate contribution or payment of premium, in enjoyment of benefits in the nature of Life Insurance whether linked to their deposits in Provident Fund or not and such benefits are more favorable than the benefits admissible under the Insurance Scheme. It is granted by the Central Provident Fund Commissioner by notification in the official gazette and is subject to conditions that may be specified in the notification. It is granted either prospectively or retrospectively.
Pending grant of exemption to an establishment relaxation order may be issued under Para – 28 (7) of the Employees Deposit Linked Insurance Scheme, 1976.
An establishment exempted from the operation of Employees’ Deposit Linked Insurance Scheme, 1976 is required to submit a monthly return to the Regional Provident Fund Commissioner by the 25th of the month in Form 7(IF).
Para 28 (4) of the Scheme provides for grant of exemption by the Central Provident Fund Commissioner to any Class of employees.
Under Section 17 (2B) read with Para – 28 (1) of the Employees’ Deposit Linked Insurance Scheme, 1976, the Regional Provident Fund Commissioner may grant exemption from the operation of all or any of the provisions of the Employees’ Deposit Linked Insurance Scheme to an employee.
The establishment shall pay inspection charges at the rate of 0.005 % of the basic wages and Dearness Allowance subject to a minimum of Rs.1/- per month.
From India, Mumbai
While thanking Govindsinghnegi for his input, I am giving some more inputs on the exemption and it's advantages for the benefits of all, as under:
Advantages of Employees’ Deposit linked insurance Fund Scheme
Advantages to the Employer:
The premium payable by the employer is usually less than the total contribution being paid by the employer to R.P.F.C; particularly when the salary level is high and average age of the group is low.
Settlement of claim is quicker, LIC requires only the death certificate and the Claim Form from the employer.
Premium paid by the employer is treated as normal business expenses for Income-Tax purpose.
Advantage to the Employee:
Each employee is covered for a sum assured ranging between 5,000 to 2,00,000 depending upon the current salary and service put in from day one irrespective of the actual balance in the Provident Fund. Alternatively every employee/ worker can be covered for a uniform sum assured which will be decided depending upon the group size.
Accident Benefit:
Double accident benefit can be allowed to the extent of the Sum Assured for an extra Premium.
Steps to introduce the scheme:
Put up notice for the knowledge of the employees that you are going in for LIC's Scheme in lieu of EDLI.
Apply to the Regional Provident Fund Commissioner under Sec.17 (2A) of the E.P.F. and M.P. Act 1952 to exempt you from EDLI Scheme. The application should be accompanied by the prescribed requirements including the Rules of the Proposed Group Insurance scheme. Central PF Commissioner has authorized the R.P.F.C. to grant exemption from the 1st of the month in which the application for relaxation is submitted. LIC also offers necessary guidance to the employers for seeking relaxation.
Exemption from the Employees Deposit Linked Insurance Scheme, 1976
Section 17 (2A) of the Act provides for grant of exemption from the operation of Employees Deposit Linked Insurance Scheme, 1976. It is granted to an establishment, where the employees are, without making any separate contribution or payment of premium, in enjoyment of benefits in the nature of Life Insurance whether linked to their deposits in Provident Fund or not and such benefits are more favorable than the benefits admissible under the Insurance Scheme. It is granted by the Central Provident Fund Commissioner by notification in the official gazette and is subject to conditions that may be specified in the notification. It is granted either prospectively or retrospectively.
Pending grant of exemption to an establishment relaxation order may be issued under Para – 28 (7) of the Employees Deposit Linked Insurance Scheme, 1976.
An establishment exempted from the operation of Employees’ Deposit Linked Insurance Scheme, 1976 is required to submit a monthly return to the Regional Provident Fund Commissioner by the 25th of the month in Form 7(IF).
Para 28 (4) of the Scheme provides for grant of exemption by the Central Provident Fund Commissioner to any Class of employees.
Under Section 17 (2B) read with Para – 28 (1) of the Employees’ Deposit Linked Insurance Scheme, 1976, the Regional Provident Fund Commissioner may grant exemption from the operation of all or any of the provisions of the Employees’ Deposit Linked Insurance Scheme to an employee.
The establishment shall pay inspection charges at the rate of 0.005 % of the basic wages and Dearness Allowance subject to a minimum of Rs.1/- per month.
From India, Mumbai
Please find below the example to understand the calculation of PF,EPS and EDLI -
Consider an employee getting a basic salary of 7500/- Contribution Towards Calculation Amount
A/C 1. EPF Employees share 7500 x 12% = 900 + EPF employer share 6500 x 3.67% = 239
A/C 10. EPS Employer share 6500 x 8.33% = 541 + 1.16 % contributed by Central Goverment
A/C 21. EDLI charges 6500 x 0.5% = 33
A/C 2. EPF Admin charges 6500 x 1.1% = 72
A/C 22. EDLI Admin charges 6500 x 0.01% = 0.65 ( Round up to Rs 1/-)
** Incase employer takes insurance from any other company then A/C 21 charges would be Nil and A/C 22 charges would be .005 % is applicable.
**Once we take the EDLI exemption from LIC or any other then it applicable three years after that we need to renew the same.
10 % contribution in case of
o Any establishment in which <20 employees are working.
o Sick Industries ( Declared by BIFR)
o Any establishment in the Jute, Beedi, Brick, Gum industry.
From India, Kota
Consider an employee getting a basic salary of 7500/- Contribution Towards Calculation Amount
A/C 1. EPF Employees share 7500 x 12% = 900 + EPF employer share 6500 x 3.67% = 239
A/C 10. EPS Employer share 6500 x 8.33% = 541 + 1.16 % contributed by Central Goverment
A/C 21. EDLI charges 6500 x 0.5% = 33
A/C 2. EPF Admin charges 6500 x 1.1% = 72
A/C 22. EDLI Admin charges 6500 x 0.01% = 0.65 ( Round up to Rs 1/-)
** Incase employer takes insurance from any other company then A/C 21 charges would be Nil and A/C 22 charges would be .005 % is applicable.
**Once we take the EDLI exemption from LIC or any other then it applicable three years after that we need to renew the same.
10 % contribution in case of
o Any establishment in which <20 employees are working.
o Sick Industries ( Declared by BIFR)
o Any establishment in the Jute, Beedi, Brick, Gum industry.
From India, Kota
Dear Shri. Akhil Gupta ji,
Greetings of the day, Sir to you.
With due respect to you Sir, I would like to make certain corrections as under:
1. A/c. 22 EDLI Admn.Charges minimum payable Rs. 2/- and not Re.1/-;
2. In case employer contributes towards insurance scheme in lieu of EDLI then A/c 21 and A/c. 22 charges would be Nil. Inspection charges are payable @ 0.005 %.
3. The rate of contribution @ 10% is applicable to only to such establishment covered prior to 22.9.97 in which less than 20 persons are employed. ( Sick units and establishment in the Jute, Beedi, Brick, Gum industry - rate of contribution @10% as stated by you.)
From India, Mumbai
Greetings of the day, Sir to you.
With due respect to you Sir, I would like to make certain corrections as under:
1. A/c. 22 EDLI Admn.Charges minimum payable Rs. 2/- and not Re.1/-;
2. In case employer contributes towards insurance scheme in lieu of EDLI then A/c 21 and A/c. 22 charges would be Nil. Inspection charges are payable @ 0.005 %.
3. The rate of contribution @ 10% is applicable to only to such establishment covered prior to 22.9.97 in which less than 20 persons are employed. ( Sick units and establishment in the Jute, Beedi, Brick, Gum industry - rate of contribution @10% as stated by you.)
From India, Mumbai
Dear A khil, As far as we r doing , Rs 541 (6500*8.33) will go rest amount (7500*12-541) =900-541=359 wiil go as Employer contribution in EPF. Regards, Sudhir Tiwari
From India, Pune
From India, Pune
1. This is a scenario where the salary of employee is more than Rs 6500 employer do not want to contribute on more than Rs. 6500 as per Para 2 6 A (2) of PF Scheme, In such a scenario the following method may be adopted to pay their contributions.
2. In the second scenario where Employee and Employer both are ready to pay contribution on more than Rs. 6500/-, Mr. Sudhir Tiwari is correct.
3. Mr. KA Thank you for the correction.
From India, Kota
2. In the second scenario where Employee and Employer both are ready to pay contribution on more than Rs. 6500/-, Mr. Sudhir Tiwari is correct.
3. Mr. KA Thank you for the correction.
From India, Kota
Hello senior, I have got lot of useful information from the posts .I like thank each one of you for putting valuable comments on above topic. Thanks Kalidhasan Natarajan
From India, Delhi
From India, Delhi
I think Admin charges is applicable on whose wages including higher contribution as 7500 X1.1% instead to 6500X1.1%
From India, New Delhi
From India, New Delhi
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