Q. With reference to the Employees’ Provident Fund Organization (EPFO), consider the following statements:
1.It is a statutory body formed under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952.
2.The maximum contribution rate by both the employee and employer towards the Employee Provident Fund (EPF) is 18%.
3.EPFO covers all employees in India, irrespective of their sector of employment.
How many of the statements given above are correct?
Explanation –
Statement 1 is correct. The Employees’ Provident Fund Organization (EPFO) is a statutory body formed under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. It provides social security benefits to its members in the form of provident fund, pension, and insurance.
Statements 2 and 3 are incorrect. The employee and the employer contribute to the EPF India scheme on a monthly basis in equal proportions of 12% of the basic salary and dearness allowance. The EPFO primarily covers employees in the organized sector of India, which includes establishments with 20 or more employees. It does not cover all employees in India, as it excludes those in the unorganized sector, such as small businesses, self-employed individuals, and casual workers.
Source: Forum IAS
