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Meaning of Exemption under the EPF Act.

• Exemptions allow eligible establishments to manage provident fund contributions through their own approved trusts.
  
• These are granted under Section 17 of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
  
• Exemptions can apply to the Provident Fund (PF), Pension Scheme (EPS), or Insurance Scheme (EDLI) individually or jointly.
  
• The purpose is to allow flexibility while ensuring employee benefits are equal to or better than the statutory schemes.
  
• The exempted establishments continue to remain under the overall regulatory purview of EPFO.
  

Types of Exemptions Available.

• Exemption from Provident Fund Scheme: Establishments manage their own PF through a recognized trust.
  
• Exemption from Pension Scheme: Allowed only under specific rules, rarely granted.
  
• Exemption from EDLI Scheme: Establishments provide better life insurance benefits than those under EDLI.
  
• Class Exemption: Granted to a category of establishments by notification under special conditions.
  
• Individual Establishment Exemption: Granted upon application and approval of the EPFO.
  

Conditions for Granting Exemption.

• The employer must apply for exemption with supporting documents and trust rules.
  
• Employee benefits under the private trust must be equal to or better than EPFO benefits.
  
• The trust must be registered and governed by a valid board of trustees.
  
• Annual audits, investment guidelines, and regular reporting must be strictly followed.
  
• Employees must be informed about the trust and their rights under it.
  

Responsibilities of Exempted Establishments.

• Maintain detailed employee-wise PF records and passbooks.
  
• Deposit employee and employer contributions into the trust account on time.
  
• Calculate and credit interest at least equal to the rate declared by EPFO.
  
• Submit monthly and annual compliance reports and audit certificates.
  
• Allow inspections and adhere to rules prescribed by EPFO and the Ministry of Labour.
  

Revocation of Exemption.

• Exemptions can be revoked if the trust fails to comply with EPF norms.
  
• Non-submission of returns or delay in remittances may lead to cancellation.
  
• Employees must be transferred to the EPFO system in such cases.
  
• All balances must be transferred securely to EPFO accounts upon revocation.
  

The employer is liable for any shortfall or loss incurred due to trust failure.