Any employer registered under the Employees’ State Insurance Corporation (ESIC) is required to follow a number of statutory obligations and requirements. The filing of an annual return is one of the significant obligations. Filing an annual return with ESIC maintains transparency of contribution, verification of employees’ details and compliance with statutory requirements under the Employees’ State Insurance Act, 1948.
In this blog, we explained the procedure of filing an annual return with ESIC, including specifying full detailed forms in the respective sections, together with timelines and required documents to avoid penalties and compliance.
What is ESIC and the Importance of Filing the Annual Return?
The Employees’ State Insurance Corporation is a social security agency which provides medical, cash, maternity, disability and dependent benefits to employees of establishments covered by the ESI Act. The scheme also requires both the employer and employee to make a minimum monthly contribution based on percentages of the employee’s wages into the ESI fund.
In addition to the monthly contribution due every month, each registered employer must also make an annual return to the ESIC, so the corporation can check compliance with contributions and maintain accurate records of insured employees.
Importance of Filing the Annual Return
- Ensures accurate reporting of employees and contributions
- Ensures transparency between the organization and ESIC
- Assists in avoiding penalties and interest due to non-compliance
- Assists in claims for employee benefits and the accuracy of records
- Indicates compliance with legal obligations during audits and inspections.
Who is Required to File ESIC Annual Returns?
All employers within the scope of the ESI (Employee State Insurance) Act, 1948 must file annual returns if:
- they employ 10 or more employees (in most states) with wage levels up to ₹21000 per month, and if:
- The establishment has received an ESI registration number from the corporation
- The business has deducted and deposited ESI contributions for eligible employees during the applicable financial year
It involves establishments such as factories, shops, hotels, restaurants, educational establishments, private companies, and others.
Due Date for Filing ESIC Annual Return
Annual returns under ESIC must be filed once every financial year, with the due date being 11th May, subsequent to the close of the financial year.
For example:
For the financial year 2024-25, the due date for filing the ESIC annual return would be 11th May 2025.
Documents Necessary for Filing ESIC Annual Returns
Prior to filing the return, employers should accumulate and validate the following documents:
- Employee Register containing the information of ESIC-insured employees.
- Monthly ESI challans or contribution payment receipts.
- Form 6 – Register of Employees demonstrating monthly contributions.
- Attendance records and salary sheets of all employees.
- ESI Number and Registration Certificate.
- Employee-wise particulars such as name, insurance number, date of joining and wage details.
- Bank statement demonstrating contribution payments.
Keeping records accurate and complete will ensure that you file smoothly and lower the likelihood of your return being rejected.
Form for ESIC Annual Return Filing
The ESIC annual return is filed using Form 1A (Return of Contributions). This form gives a summary of the total contributions made by the employer and the employees during the year.
Form 1A will contain the following:
- Employer’s particulars (name, code number and address)
- Number of employees enrolled under ESIC.
- Total wages disbursed for the year.
- Total employer’s contribution and employees’ contribution.
- Contribution period (April to March).
- Declaration and verification by the employer.
Complete Steps for Submitting Annual Return to ESIC Online
Submitting ESIC annual returns is a straightforward process, as you can do it through the official ESIC website. Given below is the complete procedure:
Step 1: Access ESIC Portal
Open the official ESIC portal – www.esic.gov.in. Click the option ‘Employer Login’ and login by entering your ESI Code Number and other credentials.
Step 2: Access ‘Return of Contributions’
Once logged in, go to the section ‘Monthly Contribution’ and Click ‘File Return of Contributions’ under Return of Contributions (RC) menu.
Step 3: Select the Contribution Period
Select the required financial year, i.e. April 2024 to March 2025, for which you are submitting the annual return.
Step 4: Verification of Employees’ Details
The portal will display all employees listed in the company. Ensure that all details with respect to the employees, i.e. Name, Insurance No and Contribution amount, are entered correctly.
Step 5. Validate Contribution Amounts
The system will automatically display total employer and employee contributions for each month. Carefully validate that the totals are consistent with the values for a frame generated from the internal payroll and payments.
Step 6: Upload Required Documents
Upload the scanned required documents, which may include salary registers, challans or Form 6, if requested by the portal and/or local ESIC office.
Step 7. File the Return
Once you have provided all the required information, or as much as you are confident about, your return will be filed when you select Submit. At the same time, the portal will confirm that your return has been submitted and create an acknowledgement number for your records.
Step 8: Download Acknowledgement
Download the receipt and keep it for your records. This is your proof of compliance, which you may want to keep for auditing and/or inspection.
Impact of Non-Compliance
Not filing your ESIC annual returns or submitting a return with incorrect particulars may result in penalties and/or legal actions.
Standard Penalties include:
- A fine of up to ₹5,000 for not filing, or for late filing.
- Interest for delayed payments pursuant to Section 39(5)(a) of the ESI Act.
- You may even be prosecuted for repeat offences.
To prevent these circumstances from arising, employers must maintain proper documentation and file on time.
Possibility of Offline Filing
While Employer compliance with ESIC should be done electronically, Offline filing is available in rare circumstances. When this is the case, another option is to have Form 1A manually submitted at your local ESIC branch.
Filing electronically is faster, safer, and it is the preferred method.
Post Return Filing
After you have filed the return, Employers then need to:
- Keep an acknowledgement and submit receipts of submission.
- Hold salary registers and attendance records available at all times for inspection.
- Continuously update personnel records regarding new hires or personnel departures.
- Monitor your ESI monthly payment by reconciling against the return filed.
Key Tips for Smooth Filing
- Always verify employee insurance numbers before submission.
- Ensure all ESI payments are made on time and reflect correctly in the portal.
- Keep all challans and receipts organised for easy reference.
- File returns before the due date to avoid penalties.
- Review the form carefully once filed; rectifications may require additional applications.
Conclusion
Filing the ESIC annual return is not just a statutory obligation; it is a reflection of an employer’s commitment to employee welfare and compliance. The procedure, though detailed, is straightforward if the company maintains proper records and follows the ESIC portal’s steps carefully.
By submitting accurate returns on time, employers can ensure uninterrupted benefits for employees, maintain trust, and stay fully compliant under the Employees’ State Insurance Act, 1948.
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