Retirement fund body EPFO has removed the grace period of five days given to employers to deposit the provident fund (PF) contribution.
Earlier, employers paid the PF contributions and administrative charges within 15 days of close of every month and had a grace period of five days.
The grace period was to remit contributions as the calculation of wages of the employees and their corresponding dues under the three schemes -- Employees Provident Fund Scheme 1952, Employees Pension Scheme 1995 and Employees Deposit Linked Insurance Scheme 1976 -- was done manually.
Therefore, its remittances in the bank required additional time in the earlier manual setup. The Employers Provident Fund Organisation (EPFO) in a circular said that the grace period has been removed with effect from February 2016 and the contributions for the current month have to be deposited in February.
Explaining the reasons behind the move, EPFO said: "In the present era, employers compute the wages and EPF liabilities electronically (in most of the cases on real time basis) and file Electronic Challan-cum-Return (ECR). "The remittances are also being deposited through internet banking.
This has reduced the process and time taken in calculation of PF dues and its remittances in the bank." Accordingly, it has been decided that concession of grace period of 5 days available to the employers for depositing the contribution and other dues is withdrawn, it said.