FINANCE AND ACCOUNTSCentral

Section 121 of The Code on Social Security, 2020

Writing off of losses.

Subject to the conditions as may be prescribed by the appropriate Government, where any of the Social Security Organisations is of the opinion that the amount of contribution, cess, interest and damages due to it, under this Code, is irrecoverable, the concerned Social Security Organisation may sanction the writing off of the said amount in such manner as may be prescribed by the appropriate Government: Provided that in the case of Provident Fund, Pension Fund or Insurance Fund, such writing off shall be specified in the Provident Fund Scheme or Pension Scheme or Insurance Scheme, as the case may be.

Summary

Any Social Security Organisation has the authority to write off outstanding amounts like contributions, cess, interest, and damages if they are found to be irrecoverable.
The conditions and procedures for writing off these bad debts are prescribed by the appropriate government.
For specific funds like the Provident Fund, Pension Fund, or Insurance Fund, the rules for writing off must be laid down directly within their respective schemes.

Practical examples

1Ramesh ran a brick kiln that went completely bankrupt in 2022. The local Building Workers' Welfare Board tried to recover 2,00,000 rupees in unpaid welfare cess and interest but found no assets left. Under Section 121, the Board formally wrote off this loss as irrecoverable.

2Priya closed down her small boutique, leaving behind 50,000 rupees in unpaid employees' provident fund contributions. Because the business had no remaining funds, the Central Board decided to write off this outstanding amount according to the terms of the Employees' Provident Fund Scheme.

FAQ

1. How can an organization write off unpaid dues under Section 121 of the Code on Social Security, 2020?

Under Section 121 of the Code on Social Security, 2020, if a Social Security Organisation finds that outstanding contributions, cess, interest, or damages are irrecoverable, it can formally write them off according to conditions set by the appropriate government.

2. Can the Employees' Provident Fund Board write off losses under Section 121 of the Social Security Code?

Yes, under Section 121 of the Social Security Code, the Central Board can write off irrecoverable provident fund dues, but the action must follow the specific rules laid down in the Employees' Provident Fund Scheme itself.

3. What types of outstanding debts can be written off under Section 121 of the 2020 Social Security Code?

Under Section 121 of the 2020 Social Security Code, a Social Security Organisation can write off irrecoverable contributions, cess, interest, and damages.

Test yourself

1.Under Section 121 of the Code on Social Security, 2020, who has the power to prescribe the conditions subject to which Social Security Organisations can write off losses?

2.Under Section 121 of the Code on Social Security, 2020, where must the rules for writing off dues be specified for the Provident Fund, Pension Fund, or Insurance Fund?

3.According to Section 121 of the Code on Social Security, 2020, which of the following outstanding dues can be written off by a Social Security Organisation if found irrecoverable?

4.Under Section 121 of the Code on Social Security, 2020, who is authorized to sanction the writing off of irrecoverable dues?

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