Compliance News @ Mynd: Amendment in Section-192 A of the IT Act

Please find below the summary of the circular detailing the amendments issued by office of the Central Provident Fund Commissioner on applicability of changes in Finance Act 2015 ( insertion of section 192A regarding the taxation on withdrawal of PF Accumulations). Provisions of the said circular shall take effect from 1^st June 2015. The gist of the circular is being given here under-:

1.   Hither to fore no income tax was deducted on the PF accumulations refunded by the PF authorities on the members leaving employment of their employers.

2.   

      Consequent upon amendments carried out through the Finance Act 2015, effective from 1^st June 2015, Income tax will be deducted by the PF Authorities at the time of payment of PF accumulations to the members in the following cases-;

    Where the payment of accumulated PF balance is more than or equal to Rs. 30,000/-, with service less than five years TDS will be deducted  @ 10% provided PAN is submitted but where the members fails to submit the PAN the TDS will be deducted @ maximum marginal rate i.e. 34.608%.

3.    TDS shall not be deducted in the following cases-:

·    Transfer of PF from one account to another PF account.

·    Termination of service due to ill health of member, discontinuation/contraction of business by employer, completion of project or other cause beyond the control of the member.

·   If employee withdraws PF after a period of 5 years of continuous service , including service with former employer.

·     If PF payment is less than Rs 30,000/- but the member has rendered service of less than 5 years.

·    If employee withdraws amount more than or equal to Rs. 30, 000/-, with service less than 5 years but submits Form 15G/15H along with their PAN.

·     Form 15G and 15H may not be accepted if amount of withdrawal individual and senior citizen (60 years and above) is Rs. 2, 50,000/- and Rs. 3,00,000/- respectively. For format for Form 15G/15 H please refer attached document.

 Form 15H is for senior citizens ( 60 and above) while Form 15 G is for individuals having no taxable income.

Note: The provisions of the circular will not apply to PF Trust of relaxed/exempted establishments to whom provisions as contended Rule 8 ,fourth schedule, Part A- Recognised Provident Funds shall continue to apply.(Extracts already enclosed with the attached circular ).

COMPLIANCE NEWS: CHANGES IN DELHI-MINIMUM WAGES....

Please note that there have been changes in the Minimum Wages in Delhi as directed by the LABOUR DEPARTMENT

Please find attached the revised minimum wages notification of Delhi. Minimum Wages has been revised from April 1, 2015.

Reduction in rate of Admin Charges on PF/EDLI contributions

We are forwarding herewith copies of two Notifications bearing  No. S.O.323(E) dated 2nd February, 2015 and 324 (E) dated  2nd February, 2015 issued by Government of India, Ministry of Labour and Employment New Delhi.

Note:  The above mentioned two notifications relate to un- exempted establishments i.e. establishment to which EPF Scheme , 1952 applies. These notifications do not apply to exempted/relaxed establishments which are required to pay inspection charges in place of administrative charges. Similarly notification relating to payment of administrative charges on EDLI contribution apply to only such establishment which report compliance of EDLI , Scheme, 1956 to RPFC concerned. In other words the said notification does not apply to those who subscribe to group insurance policy obtained from an approved insurer.

The following table shows the changes brought about through these notifications:

A. Notifications bearing  No. S.O.323 (E) dated 2nd February, 2015, effective from 1st January 2015
Sr. No	Existing Provisions	Revised Provision	Impact
(i)	The rate of administrative charges payable under para 38 of the EPF Scheme,1952 at present is @1.10% of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon	This rate has now been reduced to 0.85% of the pay (basic wages, dearness allowance, retaining allowance, if any, and cash value of food concessions admissible thereon)	Thus , as a result of the issue of present notification, the liability of an employer towards payment of such administrative charges shall stand reduced  except in cases of smaller establishments who were required to pay the administrative charges @ 1.10% of pay of the members employed by them amounting to rupees less than Rs. 75/-  per month in case of non-functioning establishment  having no contributing member and Rs. 500/- per month per establishment for other establishments.
(ii)	No minimum amount was prescribed for payment of such charges	A minimum sum of Rs. 75/-  per month for every non-functional establishment having no contributory member and Rs. 500/- per month per establishment  for other establishments.
B. Notifications bearing  No. S.O. 324 (E) dated  2nd February, 2015 ,effective from 1st January 2015
Sr. No	Existing Provisions	Revised Provision	Impact
(I)	The rate of payment of administrative charges  on EDLI contribution was prescribed @ 0.01%  of aggregate of the basic wages , dearness allowance(including cash value of food concession ) and retaining allowance  if any payable by the employer in relation to his employees	This rate remains the same	The liability of the employer towards payment of such charges has now gone up in cases of establishments who were paying such charges amounting to less than Rs. 25 per month in case of non-functional establishments having no contributory members and less than Rs. 200 per month per establishment in case of other establishments.
(ii)	The minimum amount payable towards such charges was fixed earlier as Rs.2/- per month vide  notification No . S.O 237 dated 11th Jan 1989	This minimum amount has now  been enhanced to Rs 25 per month for every non-functional establishment having no contributory member and Rs. 200 per month per establishment for other establishments

Compliance Adminstration Services

Statutory compliance administration is very crucial today, because the tax and finance world is changing at a rapid pace. Government is continually changing the laws and creating new rules very frequently. Hence, staying updated on constantly changing tax laws and regulations, meeting strict government deadlines, and avoiding costly fines and penalties can be an administrative burden for a company of any size. 

Statutory Compliance Management by Mynd Solutions

Mynd has a strong partner network to ensure that global statutory compliance services are provided in line with the local rules and regulations. We specialize in statutory compliance management and help our clients in complying with the local laws and procedures and maintain regular compliance to prevent any non-compliance issues thereby streamlining business processes that adds up tangible and intangible financial benefits for our clients. Mynd provided a single point of contact for India compliances and also for global compliances.

To ensure that the local requirements are fully compliant, Mynd provides the following:

Mynd Prepares and submits monthly/quarterly/yearly payroll related documents to various government authorities under the required name as per local laws. Wherever applicable, Mynd handles monthly / quarterly / yearly tax computations and prepares relevant statutory reports. Wherever it's applicable, an ESS (Employee Self Service) panel is provided for employee’s tax declaration purpose. Mynd Prepares and communicates year end submission guidelines document after confirmation with Client.

Mynd’s retirement benefits platform provides a one stop solution to our clients, whether they are with the Government run RPFC or they have their own trust. The entire process runs on a PF platform which brings transparency and accountability to the entire process. Mynd helps companies address the need to mitigate pension expense volatility and enhance investment performance by utilizing sophisticated asset allocation, hedging, risk management strategies and every other compliance management aspects. We utilize a strategic approach to help clients manage all aspects of their employee’s retrials benefits.

The spectrum of Compliance Management Services we offer includes:

• Provision of tangible and in-tangible benefits by setting up an in-house Fund to Client’s organization and its employees
• Drafting of trust deed and rules including all legal activities in this regard
• Handling complex activities related to obtaining approvals from Income Tax Department, Provident Fund Office and any other department
• Day to day administration services for Fund including accounting, legal and transaction
• Processing Services with latest automation techniques
• Transparent and IT enabled Help Desk Services for Members