A revised electronic challan-cum-return (ECR) method was introduced by the Employees’ Provident Fund Organization (EPFO) beginning with the September salary month, as per the Central Provident Fund Commissioner‘s most recent announcement. This is meant to help businesses and employers file returns more easily and accurately.

The new facility divides the creation of payments from the return submission process. Additionally, system-based validations are included to stop improper returns from being filed.

In accordance with Employees’ Provident Funds Act sections 14B and 7Q, the revised system will compute interest and damages automatically.

Along with monthly contributions, it will also require employers to pay interest under section 7Q.

While Section 14B permits EPFO to apply penalties for payment defaults, Section 7Q mandates that employers pay interest on outstanding balances until the date of payment.

The current return file format (.txt) will not change in spite of the modifications. The technology will allow employers to submit regular, supplemental, or amended returns.

The action is part of an effort to make the organization more user-friendly, according to an EPFO representative.

It is anticipated that the modifications will lessen data-entry errors that previously made submitting returns difficult.

Additionally, the updated system would assist in preventing mistakes in Employees’ Pension Scheme (EPS) pension contributions.

For example, many businesses erroneously pay contributions under the EPS heading even though employees making more than Rs 15,000 per month are not eligible. To ensure accurate submissions, the new system will highlight such mistakes prior to filing.

In a similar vein, unless an employee chooses to participate in deferred pension, EPS participation expires at age 58.

Previously, there were complaints because the system did not halt payments to the pension fund for workers above the age of 58.

The updated ECR will now automatically limit contributions after 58 years unless the employer designates them as delayed pensions.

The EPFO anticipates that these steps will make compliance easier, cut down on errors, and provide businesses and employees more clarity.