EPF & Miscellaneous Provisions Act, 1952


The Employees’ Provident Funds (EPF) and Miscellaneous Provisions Act, 1952 is one of the key social security schemes that provides for compulsory contributory fund for securing the future of an employee after their retirement or for their dependents, in case of the employee’s early and untimely demise. The Act also provides the institution of pension fund, deposit-linked insurance fund for employees in factories and other establishments.  

As per Section 7(Q) of the Act, an employer is liable to pay simple interest at the rate of twelve percent per annum on an amount due from him under this Act from the date on which the amount has become due till the date of its actual payment.  

As recognised by the Act, income tax exemption under Section 80C of the IT Act is applicable. 

Section 1(3) and Section 3 of the Act highlights that the provisions of the Act shall be applicable to every factory which is engaged in any industry as specified in Schedule I and in which 20 or more persons are employed. Schedule I of the Act lists 180 manufacturing industries that fall under the purview of this Act. Some of the manufacturing industries included in this list are cement, cigarettes, electrical/ mechanical or general engineering products, iron and steel, paper, textiles, matches, edible oil, sugar, rubber, tea, glass, tiles, heavy and fine chemicals, mica, plywood, cereal milling, petroleum or natural gas refining, etc. Establishments that were not included in the original schedule under the law in 1952 but were later added in subsequent years include – theatres, canteens, medical practitioners, travel agencies, establishments rendering expert services such as supply of personnel, advice on domestic or departmental enquiries, Katha making, agricultural farms, fruit orchids, financial establishments, any school/ university/ scientific institutions, media companies, airports, etc.  

Any establishment to which the Act applies shall continue to be governed by the Act even if the number of employees fall below 20. 

Section 2(b) of the Act defines the term ‘basic wages’ that includes all remuneration that an employee earns while on duty or on leave or on holidays in accordance with the terms of employment contract and are paid or payable in cash. The definition excludes monetary value of food concession, dearness allowance, house rent allowance, bonus, commission or any other similar allowance payable to the employee. 

Section 5 outlines the matters to be included while formation of EPF under this Act by the Central Government. Sub-sections of Section 5 further outlines criteria for constitution of Central Board; Executive Committee to assist the Central Board; State Board; and, appointment of officers.  

Section 6 of the Act outlines the contribution made by the employer to the Fund to be 10 percent of the basic wage, plus dearness allowance and retaining allowance (if any) being payable to all employees (whether employed by the employer or by a contractor). The Section also states the contribution of an employee to the EPF to be equal to the contribution made by the employer. An employee is free to voluntarily put more than ten percent of their basic wage into their Provident Fund (PF). However, the employer is not obligated to match the increased contribution by an employee. 

Section 6(A) outlines the objective of the Employees’ Pension Scheme, which includes providing for superannuation pension, retiring pension or permanent total disablement pension to employees of any establishment. The term ‘Superannuation’ in relation to an employee who is the member of the Pension Scheme means the attainment of the age of fifty-eight years. It also includes widow or widower’s pension, children pension or orphan pension payable to the beneficiaries of the employee. 

The EPF Appellate Tribunal is constituted under Section 7(D) to exercise powers and discharge the functions conferred on such Tribunal by this Act. 

According to Section 14(B), in case an employer fails to make payments/their contribution to the Fund, the Central Provident Fund Commissioner or such other officer have the power to recover from the employer by way of penalty.  

Section 17(A), PF account can be transferred if an employee moves from one establishment to another where the PF scheme is applicable.  

Chapter 8 of the Act outlines all the necessary information about ‘Nominations, Payments and Withdrawals’. According to Sections 68(H) – 68(O) under this Chapter, employees can take advances/withdraw the PF amount in case of retirement, medical care, housing, family obligation, education of children & financing of life insurance policies.