Employees Provident Fund

Provident Fund ?

EPF stands for Employee Provident Fund that is a scheme for providing a monetary benefit to all salaried individuals after their retirement. The process is monitored by the Employee Provident Fund Organisation of India. Any organisation that has more than 20 employees must register with the EPFO.

Employee Provident Fund (EPF) acts as a saving tool for the employees. The employee and the employer contribute an equal amount towards savings that can be availed upon retirement or after switching jobs.

n 1952, the PF (Provident Fund) or EPF scheme was introduced under the Employee’s Provident Fund and Miscellaneous Act. All the rules and regulations are defined by the Employee Provident Fund Organisation. The EPFO’s activities are managed by the Ministry of Labour and Employment.

Employee's contribution to EPF

Employees’ Provident Fund or EPF is a collection of funds contributed by the employer and his employee regularly on a monthly basis. Employee contribute 12% each of the employee’s salary (basic + dearness allowance) to the EPF. These contributions earn a fixed level of interest set by the EPFO. The amount of interest to be received on the deposit along with the total accumulated amount is totally tax-free, i.e. the employee may withdraw the entire fund without worrying about paying any kind of tax on it.

Employer’s contribution to EPF

Similarly, the employer also contributes 12% of the employee’s salary towards EPF. But, the employer’s contribution has the following categories.

However, in certain circumstances, EPF contribution can be 10%. For instance, this can imply in the following cases –

  1. If a company has less than 20 employees

  2. The company incurs losses that are more than its entire net worth

  3. If a company is associated with beedi, jute, brick, guar gum or coir industry

The contribution can also vary in the case of women employees. In the union budget 2018-2019, new women employees can make an EPF contribution of 8% instead of 12%. This privilege is only for the first three years of employment. The primary reason for this revision was:

  1. To enable women for higher take-home pay

  2. To encourage companies to hire more women to bridge the gap

Employee Provident Fund Interest Rate

The current interest rate for EPF for the financial year 2020-2021 is 8.50%. This interest rate is calculated every month and then transferred to the Employee Provident Fund accounts every year on 31st March.

EPF Withdrawal

When an individual retires at the age of 58, 100% of the fund can be withdrawn. If a person has attained an age of 54 or above, one can withdraw 90% of its EPF fund before one year of its retirement. Even though EPF is considered to be a retirement savings scheme, funds can be withdrawn in case of certain exceptions.

Premature PF withdrawals are also allowed in case of financial emergencies. One can withdrawal only after a period of 5 years of completion of service. In the following examples where one can avail partial withdrawal:

  1. Wedding

  2. Higher education

  3. Purchase of a land/house

  4. Medical emergency

  5. House loan repayment

  6. Renovating a housing property

EPF withdrawal is also available in case of unemployment while changing jobs. In case an individual resigns for its role and remains unemployed for a month, one can withdraw 75% of its PF fund to meet its expenses.

How can I check PF balance

PF Balance Check by Sending an SMS

Member with activated with UAN can also send an SMS with the text EPFOHO UAN ENG (ENG : your Preferred language) to 7738299899. This facility is available in English, Hindi, Punjabi, Gujarati, Marathi, Kannada, Telugu, Tamil, Malayalam, and Bengali.

PF Check by giving a missed call

You can also inquire about your EPF balance by giving a missed call to the authorised phone from your registered mobile number. Give a missed call to 011-22901406 from your registered mobile number. After that, missed call you will receive an SMS providing you with your PF details.

the Electronics and IT Ministry has launched an app called “Umang.” merges different government services like Aadhaar, gas booking, crop insurance, NPS, and EPF. You can also use this app to check your PF details.

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