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What is EPF?

IndianMoney.com Research Team | Updated On Friday, January 18,2019, 12:10 PM

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What is EPF?

 

 

What is EPF (Employees' Provident Fund) in India?

In an EPF, both employee and the employer make a contribution to employee account.  Its purpose is to provide the employee with lump sum payment at the time of retirement from service. The Employees’ Provident Fund Organisation (EPFO) has allowed employees make partial withdrawal of money from their EPF accounts in return for no payments and the money can be used as a personal loan.

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SEE ALSO: 14 Situations In Which You Can Partially Withdraw EPF Money

What is EPF?

Deduction of Provident Fund from Salary:

EPF is deducted from the basic salary + dearness allowance of an individual from the moment he joins an organisation or company.  EPF contribution includes deposits made by both the employee and the employer.  The employee and the employer start contributing 12% of basic salary into the EPF account. The complete 12% of contribution goes into the EPF account along with 3.67% (out of 12%) from the employer. The remaining 8.33% comes from the employer and is diverted to your Employee’s Pension Scheme. (EPS).

Interest on EPF:

The current EPFO interest rate is 8.55% for the financial year 2017-18. The EPFO interest rate has shown a steady decline from the previous year’s rate which was 8.65%.

Tax Benefits associated with EPF:

The EPFO contributions are associated with some tax benefits as well. The contributions made by the employer are completely tax free. The employee is also eligible for income tax deduction up to Rs 1.5 Lakh a year under section 80C of the Income Tax Act.

SEE ALSO: 5 EPFO Initiatives Every Member and Pensioner Should Know

Linking your Aadhaar card with EPF:

Linking Aadhaar with the EPF pension scheme helps in the verification process of the account holder and is mandatory by EPFO. To link your Aadhaar card details with your EPF pension scheme follow the steps given below:

Employees can also get their EPF account linked with Aadhaar through the offline method by visiting the nearest EPFO office and submitting the duly filled application form along with the supporting documents.

SEE ALSO: How To Transfer PF Online?

Withdrawal of EPF:

The employees’ provident fund is a retirement corpus built from the monthly contributions made by the employer and employee. Therefore, the employee must provide a genuine reason for withdrawing funds from EPF:

  • To withdraw funds the employee must download Form 19, Form 31 or Form 10C from the EPFO members Portal.
  • The duly filled form must be attested by an authorized signatory and must contain signature on each page
  • Mention ‘Non-cooperation’ in case you are not able to get the form signed by your employer
  • The employer must attach an indemnity bond with 100 rupees stamp paper, one payslip, employment ID and appointment letter.
  • Attach proof of address and proof of identity along with the form.
  • Also attach a cancelled cheque and other necessary documents.
  • Submit the papers at the nearby EPF office.

 EPF customer service:

The EPFO has introduced a dedicated customer care service to address the queries on EPF like EPF claim, withdrawal or delay in EPF payment and so on. Follow the steps given below to contact the customer care service of EPF:

  • Visit the EPFO member portal
  • Click on ‘contact us’ button on the home page
  • The customer care number will be shown on the screen based on the city you reside

EPFO digital signature:

The EPFO has launched the concept of digital signature for members to make the process of transfer claims easier. Previously an employee had to fill Form 13 and get it attested by the earlier employer for raising a transfer claim and submit the form to the regional EPF office. The digital signature helps the employee avoid hassles of going through an elaborate process. This process has benefitted both employer and employee. Employers can approve claims easily with the help of digital signature and the employee can get his claim attested digitally in case of change of job.

Steps to check EPF balance:

The EPFO has launched an online portal where the members can easily verify their contributions and check the total balance in the EPF account from the convenience of home. Below mentioned are the steps to check EPF balance:

  • Visit the EPFO’s member portal
  • click on ‘Know your balance’ button located at the bottom of the screen
  • Select the location of your regional EPF office
  • Enter the PF account number
  • Enter your mobile number
  • Click on ‘submit’
  • You will receive a text message of your EPF balance

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IndianMoney.com Research Team

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