Payroll and Compliance - The Monthly Chronicle (August 2017)


Individual Income Tax return due date extended

This important communication is with reference to the due date for filing Individual Income Tax return.
The government of India on 31st July 2017 extended the deadline for filing the Income Tax Returns (ITRs) for the financial year 2016-17. The new deadline has been set at August 5, 2017 (The earlier deadline was July 31).

Employees’ Retention and Aadhaar Campaign launched by EPFO

The Ministry of Labour & Employment (Employee Provident Fund Organization (EPFO), has launched the Employees’ Retention and Aadhaar Campaign from 1 July 2017 to 30 September 2017, wherein Aadhaar details have to be mandatorily obtained from new employees while submitting Form 11. For old employees, Aadhaar details need to be updated in the KYC.

It has been observed that generating a Unique Account Number (UAN) on the PF portal for new employees is not possible without updating the Aadhaar Number. Aadhaar has been made mandatory effective July 17 for new UAN generation. In cases where Aadhaar is provided, the PF portal for UAN generation validates the entered Name, Date of Birth and Gender against details available on the Aadhaar database. The UAN generation fails if any of these fields do not match, and this affects the ability to remit PF contribution for these employees.

Aadhaar details should also be provided by new employees who have an existing PF UAN from their past employment. This enables quick linkage of their existing UAN to current employment. For existing subscribers, a joint declaration must be given immediately to the EPFO for updating, if there is a mismatch in personal details to facilitate accurate Aadhaar seeding.

The employee can also go to the Provident Fund website and update their KYC details.

With regard to the PMPRY scheme launched last year, the Government of India will pay 8.33% of the EPS contribution of employers for new employees earning less than Rs. 15,000. The employer can avail the benefits of the scheme only if employee details of PF and UAN are seeded with Aadhaar details.

This campaign is aimed at reducing the premature closure of accounts for reasons such as cessation, resignation, etc. Please collect your employees’ Aadhaar details and update your records accordingly.

Revised Certificate of Coverage Application

In case an employee goes abroad to work and the two countries involved have a Social Security Agreement (SSA), the Certificate of Coverage (COC) served as proof that the employee and employer are exempt from the payment of Social Security taxes to the foreign country.

Under the old process, a blank application form was required to be downloaded from the website of the Indian Provident Fund office. This was then filled and signed, both by the employer and the employee. The form, along with supporting documents, was filed at the Regional Provident Fund office. The data, as per the application form, was then manually entered by the Regional Provident Fund offices in their system and the COC was issued.

There were many challenges in this manual process. Now, to overcome these challenges, the department has amended the process by introducing an online tool and a new single form for COC application.

The revised application form can be accessed at the EPF website.

Professional Tax Rates for Pondicherry Amended

Pondicherry Professional Tax rate has been amended on 15 May 2017. The new rates are as follows:


1 – 99,999 0
1,00,000 - 2,00,000 250/-
2,00,001 - 3,00,000 500/-
3,00,001 - 4,00,000 750/-
4,00,001 - 5,00,000 1,000/-
5,00,001 and above 1,250/-

Benefits of Retention of Membership of the Provident Fund Scheme and Discouraging Premature Closure of PF Account

The basic purpose of PF contribution and accumulation is to build a corpus for old age or retirement. This purpose is not served when the entire amount is withdrawn by the PF member while leaving or changing a job with several years remaining for retirement.

In the past few months, due to the simplification of the withdrawal process, there have been many premature closures of PF account and withdrawal of the accumulated PF value. The Provident Fund Organisation is concerned about this growing trend.

EPFO has started sending communications to all employers stating the of retention of membership with EPFO and discouraging employees from premature withdrawal/closure. The EPFO has advised all employers to observe due caution and discretion while attesting and forwarding Forms 19 and 10C for premature settlement of claims. Employees resigning from one company and joining work elsewhere are now tracked through UAN/Aadhaar/Mobile Nos. etc., and withdrawal claims submitted by such employees may lead to legal complications for the employer as well as employee.

Introduction of Self-Declaration Form under Employee State Insurance Corporation (ESIC)

There have been many instances where the family particulars of an Individual Person (IP) availing the ESIC benefit varied from the number of family members registered in the Individual Person ESIC portal. This led to undue maternity benefits being availed by members. In order to obviate this issue, it has been decided to obtain a self-declaration from the Insured Woman for the number of surviving children as on the date of presenting the maternity benefit claim. If there is an inconsistency between the declaration and the particulars on the portal, then 12 weeks of maternity benefit would be paid immediately from the ESIC Branch. Any remaining payment will be made to Insured Woman within 14 days, subject to verification.
Thus, from now on, every Insured Woman is required to submit a self-declaration Form along with claim form No. 19 for the settlement of Maternity Benefit Claims.

Electronic Challan-cum-Return (ECR) Rejection Rules Following Introduction of Unified Portal

In December 2016, ECR (version 2) was introduced along with the UAN (version 2) system. The changes in functionality in ECR rejection after introduction of the new system and processes include:

  • Incorrect Month/Year mentioned in ECR – Under the new process, ECRs can be revised where month and year needs to be changed, provided no settlement was made and no PMRPY beneficiary exists.
  • Incorrect UAN mentioned in ECR / Double TRRN for the same month – ECRs can be rejected and field offices have the option to adjust the amount against future TRRN or refund the amount to the employer.
  • Double payment paid by employer against same TRRN – Amount will be refunded directly to the employer’s bank account.
  • Refund the amount against amount paid in misc. option – Field office may refund the amount to the employer by preparing a cheque manually. They also have the option to adjust this against future TRRN.
Compliance Calendar for the month of August, 2017
Due date Nature of transaction Existing rules Mode
Professional Tax - States - Remittances
10th August 17 Andhra Pradesh & Madhya Pradesh State-wise regulations By Challan
15th August 17 Gujarat Gujarat PT regulations By Challan
20th August 17 Karnataka Karnataka PT regulations By Challan & Online
21st August 17 West Bengal West Bengal PT regulations By Challan
30th August 17 Assam & Orissa State-wise regulations By Challan
30th August 17 Maharashtra Maharashtra PT regulations Online
PF Central
15th August 17 Remittance of Contribution EPF & MP Act, 1952 Online
ESI Central
15th August 17 Remittance of Contribution (Main code and Sub codes) ESIC Act, 1948 Online
7th August 17 TDS Payment Income Tax Act, 1961 Online
Labour Welfare Fund Remittances
5thAugust  Kerala (Labour Welfare Fund Act) Kerala State Labour Welfare Fund Offline

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Sources: Government Notifications, Circulars, Press releases.


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