Section 7Q of EPFMA : Section 7Q: Interest Payable By The Employer

Explanation using Example

Imagine a situation where XYZ Textiles Pvt. Ltd. has not deposited the provident fund contributions for its employees for the past six months. The due amount for this period is INR 5,00,000. As per Section 7Q of The Employees Provident Funds and Miscellaneous Provisions Act, 1952, XYZ Textiles Pvt. Ltd. will now be liable to pay simple interest at the rate of 12% per annum on the due amount from the date it became due until the date it is actually paid.

For instance, if the amount became due on January 1st and is paid on July 1st, XYZ Textiles Pvt. Ltd. would owe six months of interest on INR 5,00,000 at 12% per annum, which would be approximately INR 30,000 in interest, in addition to the principal amount of INR 5,00,000.