Applicability of Provident Fund for International Workers in India

  • Setindiabiz Team
  • February 15, 2024
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This comprehensive blog delves into the intricacies of the Provident Fund for international workers in India, elucidating the key provisions established by the Employees’ Provident Fund Organization (EPFO) in this regard. Covering eligibility criteria, contribution requirements, documentation procedures, withdrawal, and transfer protocols, as well as pension benefits, the blog serves as a valuable resource for international workers seeking clarity on their entitlements within the EPF scheme. By exploring these provisions, readers will gain a thorough understanding of their rights and benefits, ensuring they can make informed decisions regarding their social security provisions while employed in India.

BRIEF SUMMARY
The Employees’ Provident Fund Organization (EPFO) is a statutory body that manages the Employees’ Provident Fund (EPF), a social security scheme for employees in India. EPFO has made provisions for international workers who are employed in India to ensure that they can also avail the benefits of the EPF Social Security Scheme. Employers are required to file a monthly return with the EPFO for all employees, including international workers. The monthly return includes details such as the employee’s name, Universal Account Number (UAN), and EPF contributions made by both the employer and the employee. The return must be filed within 15 days from the end of the month for which it is being filed.
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Eligibility Criteria of Provident Fund for International Workers in India

The eligibility criteria for contribution to EPF are the same for both Indian and international workers. Both the employer and the employee are required to make monthly contributions towards the EPF. International workers are required to provide their passport, work permit, and other relevant documents to their employer for verification.
International workers can withdraw their EPF contributions once they leave their job in India or transfer their EPF balance to a new employer’s EPF account. International workers who complete ten years of service in India are eligible for an EPS pension. The EPFO has made it possible for international workers to avail the benefits of EPF, ensuring that they are not disadvantaged when it comes to social security benefits in India.
Play Video about Provident Fund for International Employees
The Employees’ Provident Fund Organization (EPFO) is a statutory body that manages the Employees’ Provident Fund (EPF), a social security scheme for employees in India. EPFO has made provisions for international workers who are employed in India to ensure that they can also avail the benefits of EPF. The social security system in India is governed by the Employees’ Provident Funds (EPF) Miscellaneous Provisions Act, 1952, which manages three main schemes – the Employees’ Provident Fund (EPF) Scheme, 1952, the Employees’ Pension Scheme (EPS), 1995, and the Employees’ Deposit Linked Insurance Scheme (EDLI), 1976.

Key Provisions Regarding Provident Fund for International Workers

The Employees’ Provident Fund Organization (EPFO) has established essential regulations to ensure that international workers employed in India can avail themselves of the benefits of the Employees’ Provident Fund (EPF). These measures are pivotal in ensuring that international employees enjoy equitable treatment and social security provisions during their tenure in the country. Listed below are a few key provisions regarding provident fund for international workers in India you must know!
  • Eligibility: International workers who are employed in India for a minimum period of six months are eligible to contribute to EPF. The eligibility criteria for contribution to the EPF are the same for both Indian and international workers.
  • Contribution: Both the employee and the employer are required to make monthly contributions towards the EPF. The contribution amount is fixed at 12% of the employee’s basic salary plus dearness allowance (DA). The employer contributes 8.33% of the employee’s basic salary plus DA towards the Employees’ Pension Scheme (EPS), subject to a maximum limit of Rs. 15,000 per month.
  • Documentation: International workers are required to provide their passport, work permit, and other relevant documents to their employer for verification. The employer then registers the employee with EPFO and obtains a Universal Account Number (UAN) for the employee.
  • Withdrawal: International workers can withdraw their EPF contributions once they leave their job in India. However, if they leave India before completing five years of continuous service, they will have to pay tax on their EPF withdrawals. If they complete five years of continuous service, the withdrawals are tax-free.
  • Transfer: If an international worker changes their job in India, they can transfer their EPF balance to the new employer’s EPF account. The EPFO provides an online facility for EPF transfer, which is known as the ‘One Member One EPF Account’ (OMOEPA) facility.
  • Pension: International workers who complete ten years of service in India are eligible for an EPS pension. The pension amount is based on the employee’s average salary and the number of years of service. The maximum pension amount is Rs. 7,500 per month.

EPFO has made provisions to ensure that international workers in India can also avail the benefits of EPF. International workers who are employed in India for a minimum period of six months are eligible to contribute to EPF, and they can withdraw their EPF balance or transfer it to a new employer’s EPF account. International workers who complete ten years of service in India are also eligible for an EPS pension. The provisions regarding the Provident Fund for International workers ensure that they are not disadvantaged when it comes to social security benefits in India.

Conclusion

FAQs

Q1: What is the significance of the Provident Fund for International Workers in India?

The Provident Fund for international workers in India plays a crucial role in ensuring social security benefits for employees, including international workers. It offers financial stability through contributions made by both the employee and employer, facilitating savings and pension benefits upon completion of service tenure.

Q2: Are international workers eligible to contribute to the Provident Fund?

Yes, international workers employed in India for at least six months are eligible to contribute to the Provident Fund for International Workers. The eligibility criteria mirror those for Indian workers, ensuring equitable treatment under the EPF scheme.

Q3: How can international workers withdraw their Provident Fund contributions?

International workers can withdraw their Provident Fund contributions upon leaving their job in India. However, if they depart before completing five years of continuous service, they may be subject to taxation on their withdrawals. Withdrawals become tax-free after completing five years of service.

Q4: Can international workers transfer their PF balance when changing jobs in India?

Yes, international workers can transfer their Provident Fund balance to their new employer’s account when changing jobs within India. This process, facilitated by EPFO’s ‘One Member One EPF Account’ facility, ensures seamless continuity of social security benefits for international workers.

Q5: What pension benefits are available to international workers under the PF scheme?

International workers who complete ten years of service in India become eligible for an EPS pension under the Provident Fund scheme. The pension amount, based on the employee’s average salary and years of service, offers financial security with a maximum pension capped at Rs. 7,500 per month.

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