Electronic Challan cum Return (ECR) is a monthly return that needs to be uploaded by employers every month through the Unified Portal. It is a part of the CTC of the employees.
The returns that are filed will have the details of the wages as well as a contribution for both new and existing members. When the uploaded ECR gets approved, it will generate the challan, and the employer can submit the dues to the designated SBI branch using this challan. By this process, the uploaded ECR will be linked to the remitted challan. If the ECR is uploaded but not remitted, it is considered a lapse after 15 days of challan generation. If you upload the monthly ECR, there will be no need for the employer to file the return manually.
EPF (Employee Provident Fund) is an intrinsic part of the CTC. A small part of employees’ pay is saved in the form of Provident fund contributions for social security. This money can be withdrawn by the employee at the time of retirement. Though withdrawing the EPF amount would not be ideal, the government of India now allows the employee to withdraw the amount saved under FP after six months on the job. This amount can be used in emergency situations.
Also Read: All You Need to Know About ESI Contribution
Benefits of Electronic Challan cum Return
- You don’t need to prepare a hard copy and submit it to EPFO
- The employee gets instant confirmation of payment through SMS
- There is no need to submit other returns such as Form 5/10/12A,3A, and 6A
- The member’s account will get credited the contribution every month
- The employers can view their accounts slip, and they can also request account slips for earlier years through the portal
Advantages of Electronic Challan cum Return
Avoid penalty
All the establishments that have EPF registration need to file ECR. Failure to do so can lead to penalties as it is a crucial part of compliance. The penalties for such a failure can also result in a fine which can go up to ₹5000. In some cases, the penalty can also be imprisonment that is extended to a span of a year. Sometimes the employer can be punished with a monetary fine and imprisonment.
It is important to note that it is not just a failure to pay the amount that results in the penalties but also imprisonment. The delay in the filling can lead imposition of penal damages at the rate of 5% to 25% and interest at the rate of 12%. These penalties can be a major cost and loss for the employer, and it is best to make timely payments and stay compliant with the laws.
Brand Image
Staying compliant with the EPF payment and following all the regulations keeps your company away from negative publicity. The stainless compliance record also means maintaining good relations with government authority. This compliant status helps you in building good business relations with other organizations too.
Better Credit Score
Compliance is also essential for the credit score of employers. According to the directions issued by the Reserve Bank of India, all the Scheduled Commercial Banks need to ensure that “all statutory dues, including EPF dues, have been paid by the borrower.” This is the instruction this a bank needs to check for every year. All the companies that take credit service from any Scheduled Commercial Bank need to show an annual certificate to their auditors for the same.
Also Read: How to claim PF Online? Step by Step Guide
How to Generate ECR Challan?
Now we no more need to go to EPFO physical office as you can now generate ECR files for EPF online. The online ECR challan generation process is described step by step below.
Step 1
Log in to the Unified web portal of the EPFO website using your ECR portal log-in details
Step 2
Once you are logged in, check if your details, such as Estt Name, PF Code, Address, and Exemption status, are correct.
Step 3
Select the “PAYMENT” Menu item to proceed with the “ECR Upload” process
Step 4
Next, you need to select “Wage Month” and “Salary Disbursal Date” in the “ECR Upload” Screen.
Step 5
ECR File format is visible in the “ECR Help File” button visible on the screen.
Step 6
Your ECR (Electronic Challan cum Return) text file will appear
Step 7
Here you need to select your ECR (Electronic Challan cum Return) text file for uploading.
Step 8
Select the Rate of Contribution, which is either 12% or 10%. Note that the default value in the portal is 12%.
Step 9
Click on the “UPLOAD” button to upload your file.
Step 10
The ECR (Electronic Challan cum Return) file you upload here will be verified for predefined conditions. On the successful validation, you will see the message for the same, or an error message will be shown on the screen. For the uploaded Electronic Challan cum Return (ECR) file, TRRN will be generated next.
Step 11
Click on the “Prepare Challan” button to get your Electronic Challan cum Return summary sheet.
Step 12
Enter Admin/Inspection Charges for A/c No.2 & 22. You can also EDIT EDLI Contribution for A/c No.21. After that, click on the “Generate Challan” Button.
Step 13
You can also EDIT the challan on the screen that will appear here. Once you check the challan amount, click on the “Finalize” button. Here you can download the Ack file and Receipt from the “In-Process Challan List”.
Step 14
On the screen that will be displayed here, you will see your finalized Electronic Challan cum Return Statement and Challan
Step 15
Here, your challan is ready for Payment. You can click on the “Pay” button now.
