EPF, EPS, EDLI & EPFO — Set 4
Labour Laws · EPF, EPS, EDLI और EPFO · Questions 31–40 of 200
EPF withdrawal before 5 years of continuous service attracts which tax implication?
Correct Answer: C. TDS and the amount is added to income
If an EPF member withdraws the corpus before completing 5 years of continuous service, the withdrawal amount is added to their taxable income. TDS is deducted at 10% if PAN is provided (34.6% without PAN). After 5 years of continuous service, EPF withdrawal is fully tax-exempt.
What is the full form of KYC in the context of EPFO?
Correct Answer: A. Know Your Customer
KYC stands for Know Your Customer, which involves seeding Aadhaar, PAN, and bank account details with the EPFO UAN. Updated KYC is mandatory for online EPF withdrawals and transfers. Without KYC seeding, many EPFO online services remain inaccessible.
Which document is used by an employee to submit Form 15G for EPF withdrawal?
Correct Answer: A. To claim exemption from TDS if income is below taxable limit
Form 15G (or 15H for senior citizens) is a self-declaration submitted by an EPF member to claim exemption from TDS on withdrawal if their total income is below the taxable limit. It must be submitted along with the withdrawal claim form. Without this declaration, EPFO deducts TDS on withdrawals made before 5 years of service.
EPFO's UMANG app services include which of the following?
Correct Answer: C. PF balance, passbook, KYC update, and claim filing
Through the UMANG app, EPF members can check PF balance, download e-passbook, update KYC, raise and track claims, and transfer PF accounts. UMANG integrates over 2,000 government services from various ministries. It is available on both Android and iOS platforms.
What is the employer's contribution rate for establishments with fewer than 20 employees under the EPF Act?
Correct Answer: A. Same 12% — coverage is optional for small establishments
Establishments employing fewer than 20 workers are not mandatorily covered under EPF, but if they opt in voluntarily, the contribution rates remain the same at 12% each. Some sick industries notified by the government have a reduced rate of 10% for both employer and employee. The reduced 10% rate applies to certain specified industries regardless of size.
Which percentage of employer's EPF contribution goes directly to the employee's EPF account?
Correct Answer: B. 3.67%
Out of the employer's 12% contribution, only 3.67% is credited to the employee's EPF account. The remaining 8.33% is deposited into the Employees' Pension Scheme (EPS). This means the employee's EPF corpus grows from the full 12% employee share plus just 3.67% from the employer.
The EPF Act 1952 covers establishments in how many specified industries and those notified by the government?
Correct Answer: C. Those employing 20+
The EPF Act mandatorily covers every establishment employing 20 or more persons in specified industries. The central government can also extend coverage to other establishments employing fewer than 20. Once covered, the establishment cannot exit even if the workforce drops below 20.
What is the penalty for an employer who defaults in EPF contribution payment?
Correct Answer: B. Interest and damages under Section 7Q and 14B
Defaulting employers are liable to pay interest at 12% per annum under Section 7Q and damages under Section 14B of the EPF Act, ranging from 5% to 25% of arrears. Wilful default can result in criminal prosecution and imprisonment. EPFO has the power to attach and auction the property of defaulting employers.
Family pension under EPS is payable to which family member upon the death of an EPS member?
Correct Answer: B. Spouse and children up to age 25
Upon the death of an EPS member (whether in service or retired), family pension is payable to the spouse and children (up to age 25 or marriage). The monthly family pension is 50% of the member's monthly pension or a minimum of Rs 1,000. Orphan pension is available for children who have lost both parents.
What is the early pension provision under EPS?
Correct Answer: B. Pension can be claimed from age 50 at reduced rate
EPS members can opt for early pension from the age of 50 years, with a reduction of 3% for each year before 58. For example, a member retiring at 55 would receive pension at a 9% lower rate. The reduced pension continues for life unless the member re-joins EPF-covered employment.