Removal of grace period for PF remittance

While the deadline for Provident Fund (PF) remittance by employers is the 15th of the following month, the PF department allowed an additional 5 days as grace period until now. Given that the PF remittance was done primarily by way of cheque payment at designated branches of the State Bank of India in the past, the manual system of cheque clearance and payment realization took time. Hence, the grace period of 5 days helped employers make timely PF remittances particularly when they made the remittance towards the 15th or so. As you are aware, the PF department now requires employers to make online remittances by way of internet banking. Online  remittances ensure instant payment and consequently, the PF department no longer sees the need for the grace period for PF remittance.

Effective February 2016 (PF contributions for January 2016 to be remitted in February 2016), there shall be no grace period for PF remittance. Employers need to ensure that the PF remittances are completed by the 15th of the following month in order to avoid penal charges.

You can take a look at the circular notifying the removal of grace period here.




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