EPF is also called an employee provident fund.
It is reserved for the employees of the company.
SALARY STRUCTURE:
If the company is providing our salary then it is called the cost to the company (CTC). While calculating the CTC we will have the following deductions:
- Insurance
- Gratuity
- Reimbursement for meals
- EPF
This deduction significance can reach up to 24%.
WHAT IS EPF?
Employee provident fund is a kind of investment and also it works as a pension. This EPF account is opened by the company for their employees and give a certain UAN number to the employees. It is called a universal account number. We can calculate our generated EPF using this UAN number.
According to the Act 1952, In India, this EPF is worked as a retirement scheme investment plan for the employees. This is the best investment plan for all the employees.
ELIGIBILITY:
If the company has more than 20 employees then the company itself compulsorily has to register the EPF for the employees. If the company has fewer than 20 employees then the employees who are interested can register the EPF to the company.
If the salary is less than 15000 then compulsorily have to register the EPF. If the salary is more than 15000 then the company will mandatorily let you know about the EPF.
RULES FOR EMPLOYEE AND EMPLOYER CONTRIBUTION :
If your earnings are more than 1500 then the employee or employer contribution is min 12% of ( basic+ DA) or 12% of 15000, 1800 per month. The employer contribution is called EPF and EPS. EPS is an employee pension scheme and EPF is an employee provident fund. EPF contributions are in terms of retirement accounts with interest. Whereas EPS contributions are in terms without interest.
EPF is managed by EPFO ( employee provident fund organization) . The UAN number is linked to EPFO. The interest rate in EPF is 8.25%.
BENEFITS OF EPF:
- after retirement, the employee can withdraw his EPF with an interest rate.
- You will get a monthly pension.
- You will get partial withdrawal during the emergency period.
TAX BENEFITS FROM EPF:
- according to the Income Tax Act, till certain limits, you will get the tax benefits.
- the interest earned on EPF is tax-free.
The maturity period is 5 years.
HOW TO WITHDRAW EPF?
- Scenario 1: Employee and non withdrawing funds. According to the policy of your company, you can't withdraw money until it reaches a certain Limit.
- Scenario 2: Unemployed looking for a partial withdrawal. After 3 months of unemployment, you can withdraw this EPF partially. This is a nonrefundable withdrawal.
- Scenario 3: Unemployed considering full withdrawal. You can transfer your 25% of EPF into your new account only if you are Unemployed for 2 months.
- Scenario 4: Reaching retirement age. If you have reached the retirement age then you can withdraw the complete EPF without any restrictions.
- scenario 5: Other eligible withdrawal. During the emergency period, for education purposes, or for construction purposes you can withdraw 25% of your EPF.
DISCLAIMER:
This information are given for the purpose of helping society. All this information is true and does not contain any kind of fake information here. We are not responsible for any kind of misuse of the information.
CONCLUSION:
This EPF is given by the company for the welfare of its employees. It's our duty to use these benefits. This EPF is mainly a pension related scheme. It is very useful for all the employees
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EPF