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    Budget speech by Arun Jaitley – In order to incentivize creation of new jobs in the formal sector, Government of India will pay the Employee Pension scheme contribution of 8.33% for all new employees enrolling in EPFO or the first three years of their employment. This will incentivize the employers to recruit unemployed persons and also to bring into books the informal employees. In order to channelize this intervention towards the target group of semi-skilled and unskilled workers, the Scheme will be applicable to those with salary up to `15,000 per month. I have made a budget provision of `1,000 crore for this scheme. 

    Objective of the scheme: The objective of the scheme is to: 

    • Contribute the employer portion of EPS for all new employees for the first three years of employment, who are earning a salary of up to `15,000 per month;
    • Bring the informal employees into books;
    • Generation of new employment. 

    Important terms: 

    • ECR -       Electronic Challan cum Return Challan generated after filing Provident Fund details with the EPFO
    • UAN - Universal Account Number Unique identification number allotted to the employees
    • NIC -      National Industrial Classification Code A code used to classify the business under various industries

    Scheme Eligibility (Employee): 

    • Earning a salary of up to`15,000 per month;
    • Who hasn’t worked with any establishment registered with the EPFO in the past;
    • Shall not have an UAN prior to 01st April 2016;
    • Post application of UAN, the same shall be Aadhaar seeded. 

    Scheme Eligibility (Establishments): All establishments registered with EPFO can apply for availing benefits under the scheme subject to following conditions: 

    • Establishments shall have a Labour Identification Number (LIN) allotted to them under the Shram Suvidha Portal (;
    • The eligible employer must have added new employees to his establishment;
    • The establishment shall cover under the NIC codes given in the scheme. 

    Provident Fund Contribution – General Scenario 

    Provident Fund



    Contribution under the scheme - by the Government:


    • Eligible employers will receive the employer portion of EPS i.e., 8.33% from the Government of India.
    • In employers of textile industries covered under NIC 1410 to 1430 are also eligible to get the employer portion of PF contribution i.e., 3.67%. 

    Contribution period:

    • Contribution will start from the date of receipt of UAN or 09/08/2016, whichever is later;
    • The contribution will continue for 3 years.
    • The newly joined employees under this scheme will be covered till 2019-20.

    Contribution process:


    • The employer shall remit the employer part of PF contribution i.e., 3.67% on or before 10th of following month;
    • In the case of textile industries, the employer shall remit the employee portion of Provident Fund.
    • The employer portion of EPS i.e., 8.33% and employer portion of PF i.e., 3.67% (only in case of textile industries) will be contributed by the Government of India. 

    Declaration of false information by the employer to the Government: Employers/Establishments applying for the Scheme shall be fully responsible for the information uploaded. If at any time, it is found that the information submitted is incorrect or false, it will be assumed that the EPS payment (and EPF payment for textile sector) has not been made for these employees. The employer will then beliable for dues and penalties as already specified under the relevant provisions of The Employees’ Provident Fund Scheme, 1952. 

    Industries covered under this scheme:

    • NIC 1410: Manufacture of wearing apparel, except fur apparel
    1. NIC 14101: Manufacture of all types of textile garments accessories and clothing accessories
    2. NIC 14102: Manufacture of rain coats of waterproof textile fabrics or plastic sheetings
    3. NIC 14105: Custom tailoring
    4. NIC 14109: Manufacture of wearing apparel not elsewhere classified


    • NIC 1430: Manufacture of knitted and crocheted apparel
    1. NIC 14301: Manufacture of knitted or crocheted wearing apparel and other made-up articles directly into shape (pullovers, cardigans, jerseys, waistcoats and similar articles).
    2. NIC 14309: Manufacture of other knitted and crocheted apparel including hosiery.


    • NIC1392: Manufacture of made-ups textile articles, except apparel {This class excludes – manufacture of textile articles for technical use – NIC 1399} 
    1. NIC 13921: Manufacture of curtains, bed covers and furnishings.
    2. NIC 13922: Manufacture of crocheted made up textile apparel goods except apparel
    3. NIC 13923: Manufacture of mosquito nets.
    4. NIC 13925: Manufacture of tarpaulin.
    5. NIC 13926: Manufacture of blankets.
    6. NIC 13929: Manufacture of