EPF, EPS, EDLI & EPFO — Set 15

Correct Answer: B. EPFO Payroll Data

EPFO releases monthly payroll data showing the number of new EPF subscribers added, which serves as a proxy for formal sector job creation. This data is widely used by economists, policymakers, and the media to assess employment trends in India's organised sector. The data is released with a 2-3 month lag.

Correct Answer: B. Enables tax deduction at lower rate (10%) on pre-5-year withdrawals

Seeding PAN with UAN enables EPFO to apply TDS at the lower rate of 10% on EPF withdrawals made before 5 years of service. Without a PAN, TDS is deducted at the maximum marginal rate of 34.6%. PAN seeding is also required for online claim processing and ensures correct tax compliance.

Correct Answer: C. Multiple courts — established principle under EPF Act Section 2(e)

Under Section 2(e) of the EPF Act, the definition of 'employer' includes the principal employer for contract workers engaged through contractors. Multiple high courts and the Supreme Court have upheld that principal employers are liable for EPF contributions for contract workers if the contractor defaults. This prevents exploitation through sub-contracting to avoid EPF compliance.

Correct Answer: C. 12% per annum under Section 7Q

Defaulting employers are required to pay interest at 12% per annum under Section 7Q of the EPF Act on overdue EPF contributions. Additionally, damages under Section 14B can range from 5% to 25% of arrears depending on the period of default. These penalties are designed to deter non-compliance and protect workers' retirement savings.

Correct Answer: B. Declaration by new employee about previous EPF membership for UAN linking

Form 11 is a declaration submitted by a new employee to the employer indicating whether they were a member of EPF in a previous job. If yes, the previous UAN and PF account number are mentioned for linking. This form helps EPFO maintain accurate membership records and avoid duplicate UANs.

Correct Answer: B. Bulk transfer of PF accounts when a company changes ownership or merges

EPFO's mass transfer facility allows bulk transfer of PF accounts when companies undergo mergers, acquisitions, or restructuring. This ensures continuity of EPF membership for workers when their employer changes. The facility reduces the manual burden of processing thousands of individual transfer requests.

Correct Answer: C. Union Minister of Labour and Employment

The Union Minister of Labour and Employment serves as the ex-officio Chairman of the Central Board of Trustees of EPFO. This gives political oversight to the apex policy-making body. The CPFC (Central Provident Fund Commissioner) serves as the member-secretary and administrative head.

Correct Answer: B. The payment receipt for monthly EPF remittance by the employer

A 'challan' in EPFO context is the payment document used by employers to remit monthly EPF contributions to EPFO. The Electronic Challan cum Return (ECR) is the digital version. The challan contains employee-wise contribution details and must be filed by the 15th of each month for the previous month's wages.

Correct Answer: B. Non-refundable advance

The special EPF withdrawal allowed during COVID-19 under PMGKY was explicitly termed a 'non-refundable advance', meaning members were not required to repay the withdrawn amount. This was different from the normal EPF advance (Form 31 withdrawals) which in some cases is refundable. The non-refundable nature made it a genuine relief measure.

Correct Answer: A. Statutory body under Ministry of Labour

EPFO is a statutory body (organisation created by an Act of Parliament) operating under the Ministry of Labour and Employment. It was established under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. As a statutory body, it has legal authority to collect contributions, manage funds, and settle claims.