Most people invest in attaining three Financial goals in life - to build wealth, to have a regular Income through a pension during retirement, and to ensure the future of our families. While you can buy multiple financial products to fulfil each of these objectives, there is one solution that can assist you with all these purposes, that is - EPF!
Since the Employee Provident Fund (EPF) is a part of everybody’s salary, the majority of Indian citizens contribute towards this avenue. It is also the most popular and secure way of Investing money for financial security over the long term.
The article guides you through the fundamental components of EPF for employees.
Employees Provident Fund Organisation (EPFO) manages the Employee Provident Fund (EPF), which is a retirement benefit system. Employees and employers both contribute 12% of their base income and dearness allowance to the EPF plan on a monthly Basis in equal amounts. Employee Pension Scheme receives 8.33% of the employer's contribution. The interest rate on EPF deposits is now 8.50% per annum.
To receive benefits under this system, here are a few requirements that must be to fulfil:
EPFO assigns each member a 12-digit number that they can use to manage their PF accounts. This number is known as the Universal account number (UAN). It enables a person to obtain all Provident Fund (PF) information in one location, regardless of the company for which they work. Employees can simply withdraw and transfer monies with the use of their UAN.
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EPF registration is usually done by employers. However, it can be done voluntarily by the employee as well. Here is a step-by-step guide to registering under the EPF scheme:
'Registration For EPFO-ESIC' will be an option
Being an employee, here are the steps you can follow to login into an existing account:
Listed down are the benefits of EPF you should be familiar with:
To check the PF balance, there are four different ways:
You can check the balance by simply logging into the official website with UAN and checking the passbook
It allows you to check your EPF Passbook by logging into the member section with your UAN and registered mobile phone
By giving a missed call from your EPF-registered mobile number to 011-22901406, you can check the balance.
By sending EPFOHO UAN ENG to 7738299899 and adjusting the final three characters to the language you want the information in, you can check the PF balance.
Employees must link their EPF account to their Aadhaar and other documents, according to the government. EPFO has made it simple for anyone to update their KYC information using the online portal.
Jotted down below are some steps to be taken for EPF KYC update:
EPF can be withdrawn in two ways - either partially or fully. When a person retires or is jobless for more than two months, they are entitled to withdraw completely. Partially withdrawing from the EPF is permitted under certain conditions.
You need to fill out the EPF withdrawal form online to request a withdrawal. You can only use the online withdrawal claim option if your Aadhaar is linked to your UAN.
To fill out the EPF withdrawal form and claim online, follow the procedure below:
For easy disbursement of money, it is crucial to apply for an appropriate claim form. There are different types of EPF claim forms depending on the kind of claim.
Listed down are the types:
It is crucial to know your PF number to monitor details and transactions taking place. Here are a few ways through which you can check the PF number:
If none of the given options work, visit the nearest EPFO office grievance cell. Submit KYC details along with grievance redressal form. After the scrutiny, one can get the details of their account.
Until the year 2020, EPF deposits and interest were tax-free. However, the government declared in Budget 2021 that if a financial year's EPF and Voluntary Provident Fund (VPF) deposits exceed Rs. 2.5 lakhs, the income generated on the contributions will be taxed. If the employer fails to contribute to the EPF account, the interest component will be excluded up to a maximum deposit of Rs. 5 lakhs in the financial year in question.
With the outbreak of the COVID pandemic, EPFO has allowed its members to take money out of their EPF account twice to cover expenses. A non-refundable withdrawal of up to 75% of their EPF balance, or three months of their basic Earnings and dearness allowance, whichever is smaller, is accessible to members. You can take the remaining 25% of the money if you are unemployed for two consecutive months.
EPFO also plans to fulfil these withdrawal claims within three days and has set up an auto-claim settlement procedure for members who have completed their KYC in every way.
A: No, an apprentice cannot join the EPF; however, after they cease to be an apprentice and get a valid, full-time job, they must enlist in the EPF.
A: If the employer fails to give the PF membership, the former can contact the PF office's Regional Provident Fund Commissioner.
A: Employees who have left their jobs are not entitled to contribute to the EPF.
A: No, there is no age limit for employees who want to join the Provident Fund. However, if an employee has reached the age of 58, they are no longer eligible to join the Provident Fund.
A: No, a qualified member cannot refuse to participate in the EPF.
A: The amount of the contribution is determined by the wage paid in a calendar month.
A: No, an employee cannot join the EPF on their own. Employees need to be part of an organisation that is covered by the EPF and MF Act of 1952.
A: No, employers cannot minimise their EPF contributions. It is considered a criminal offence.