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India made it mandatory for expatriate employees working in covered establishments to contribute towards pension and provident fund. Both employer and employee were required to make matching contributions of 12% each.
An amendment excused expatriate employees coming to India on or after September 2014 from participating in the pension scheme. The entire contribution should now be made to the PF Fund.
The tax laws were amended to make the employer's contribution to the Provident Fund exceeding INR 7,50,000, along with the interest earned on the excess amount, taxable.
Another amendment made interest on employee's contributions exceeding INR 2,50,000 taxable.
In a landmark judgment, the Karnataka High Court struck down provisions extending EPF coverage to international workers, questioning the constitutionality of these provisions. This decision addressed the disparity in provident fund contributions between Indian and international employees. However, the issue is not fully settled. In a recent press release, the Employees' Provident Fund Organization (EPFO) indicated that options were being evaluated and that it might change the decision.