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EPF

The Employee Provident Fund (EPF) is a retirement benefit scheme wherein employees of an organisation (with more than 20 employees) contribute a small portion of their basic monthly income. The employer also contributes a similar amount towards the scheme on their behalf. The PF meaning Provident Fund corpus is generally utilised to fund the employee's retirement. However, under certain circumstances, employees can also choose to partially withdraw their EPF. In the end, the beneficiary/employee receives the total contributed amount along with the interest as decided by the government. The current interest rate is 8.50% p.a.

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What is EPFO

Employees Provident Fund Organization (EPFO) is a government organisation that maintains the Employee Provident Fund (EPF), a retirement benefit scheme for employees in India. The employee as well as the employer contributes to the EPF scheme in equal proportions, i.e. 12% of the employee’s basic salary and the dearness allowance, on a monthly basis. 8.33% out of the employer contribution to PF goes towards the Employee Pension Scheme (EPS).

EPF Details

Type of schemeRetirement fund for employees
Intervals for contributionMonthly
Minimum employees required in the organisation20 or more
Contribution amount12% of the basic monthly salary of the employee
Current EPF interest rate8.50% p.a.
Partial withdrawalAllowed under certain circumstances

EPF Schemes

The Employee PF is one of the largest and most popular saving schemes available to the employees in India. The EPF for employees comes with various benefits. Below are the key provident fund benefits:

  • Easy retirement: The accumulated funds along with the interest under the EPF scheme can be used by employees at the time of retirement. This provides some financial relief and security to the retired employees.
  • Long-term financial security for salaried class: Contributing employees cannot withdraw the funds deposited in this account easily and hence, it helps in ensuring savings.
  • Sudden loss of income or employment: There can be situations where an employee can lose their current job due to any reason. During times like these, PF fund can be used to meet necessary expenses.
  • Emergency funds: The funds accumulated under the employees provident fund scheme can be used in case of an emergency by the employee. Employees can also withdraw their provident fund prematurely under certain circumstances. The scheme provides such pre-term withdrawals in some special cases.
  • Resignation or quitting job: Employees are free to withdraw 75% of their Employees Provident Fund after one month of the date of resignation or quitting the job. The remaining 25% can be withdrawn after 2 months of unemployment.
  • Disability: If the employee is unable to work due to any disability then they may use their EPF funds to help them get over the difficult time.
  • Unexpected death: In case of sudden demise of the contributor/employee, the accumulated amount along with the interest is provided to their nominee. This helps the family sail through difficult times.
  • Lay-off: In the case of sudden layoffs/ retrenchment of employees from the job, EPFO for employees can be used until the time they get another suitable job.
  • Easily accessible: With the Universal Account Number (UAN), now employees can easily access their PF account through the EPFO portal. Employees can transfer their accounts whenever they change their current jobs.
  • Pension scheme benefit: The employer not only contributes for the EPF fund but also makes the contributions towards the pension of the employee, which can be used by the employee after retirement.
  • Insurance scheme: The scheme also provides for certain provisions wherein, the employer has to make some contribution towards the employee’s life insurance scheme where group insurance cover is not available. The scheme ensures the employees are properly insured.

Also, know about EPF Balance Check service.

Services Offered by EPFO

Employees Provident Fund Organisation provides the following services to mobile users through the Umang app under separate sections:

  • Employee Centric Services
    • View EPF Passbook
    • Raise Claims
    • Tracking Claims
    • View Remittance Details by Establishment ID
    • Get TRRN Status
  • EPF General Services
    • Search Establishment
    • Search the EPFO Office
    • Know the claim status
    • Account Details on SMS
    • Account Details via Missed Call
  • Pensioner Services
    • View Passbook
    • Update Jeevan Pramaan
  • eKYC Services
    • Aadhaar Seeding

Also check EPFO UAN Login.

EPF Interest Rate

The rate of interest on EPF is reviewed by the government annually. EPF interest rate for the FY 2021-22 is 8.50% p.a. Once EPFO informs about the interest rate for a fiscal year and the year ends, rate of interest is calculated for the closing balance month-wise and then for the entire year. The year in wherein the new rates are announced stay valid for the next fiscal year, i.e. from the year beginning on 1st April of one year to the year closing on 31st March of the next year.

Below are some important facts about EPF interest rate:

  • Currently, the interest rate of 8.50% is valid and it will be applicable only on EPF deposits done between April 2021 and March 2022.
  • Even though the interest is calculated on a monthly basis, it is transferred to the EPF account only on yearly basis on the 31st of March of the applicable financial year.
  • The interest transferred is added with the next month’s (i.e. April) balance and is again used for calculating the interest.
  • If no PF contribution is made into an EPF India account for continuous 36 months, the account will automatically become dormant or inoperative.
  • The interest accumulated on inoperative accounts is taxable according to the member’s slab rate.
  • Interest is also offered on inoperative accounts of those employees who have not reached the retirement age.
  • Interest is not offered on the deposited amount in inoperative accounts of retired employees.
  • Employees shall not receive any interest for contributions made towards the EPS scheme. However, a pension amount is paid out of this amount post 58 years of age.

Eligibility for EPF

  • Employees have to become active members of the PF India scheme to avail of benefits provided under the scheme.
  • Employees of an organisation (that provides EPF facility) are directly eligible for availing of the Provident Fund, insurance and pension benefits from the day they join the organisation.
  • Any organisation that employs at least 20 workers is liable to provide EPF benefits to its workers.
  • The EPF scheme is not available to the people residing in Jammu & Kashmir.

EPF Contribution

Under the EPF Scheme, the employer as well as employee has to make equal contributions to the EPF account as mentioned below.

ContributorMonthly Percentage Contribution
Employer12%
Employee12% or 10%
Total Contribution24%
  • The 12% contribution of Employer contribution to PF includes 3.67% EPF and 8.33% EPS.
  • For employee contribution to PF, 10% EPF share is applicable for the organisations
    • Having 20 or below employees.
    • Organisations with losses of more than or equal to the net worth during the end of financial year.
    • Organisations declared sick by the BIFR or Board for Industrial and Financial Reconstruction.
  • The employee’s entire contribution of PF amount deduction goes towards their provident fund.
  • Total EPF contribution of the employer is distributed as:
    • 8.33% towards EPS
    • 3.67% towards EPF
  • In addition to the contributions mentioned above, the employer also has to make an additional 0.5% contribution towards EDLI.
  • Employers also have to incur certain administration costs for EDLI and EPF at the rate of 1.1% and 0.01% respectively. This means that the total employer share in PF is 13.61% of the salary.

EPF Forms

There are different EPF forms for different activities that employees want to undertake in their accounts, including registration, withdrawal, transferring PF, availing loans from the existing EPF account, etc.

Form 2Declaration & nomination form for EPF & EPS
Form 5New employees registration for EPF & EPS
Form 5 IFClaim as per EDLI scheme
Form 10CClaiming withdrawal benefits or scheme certificate of EPS
Form 10DClaiming monthly pension
Form 11EPF Account Transfer or auto transfer of EPF
Form 14Buying LIC Policy
Form 15GSave TDS on the interest income on EPF
Form 19Final EPF Settlement
Form 20Final EPF settlement in case of employees’ death
Form 31EPF Withdrawal

Additional Info: also check AnyRoR Gujarat Land Record.

EPF Tax Rules

  • Till 2020, EPF deposits and interest were completely exempt from tax.
  • The government, in Budget 2021, announced that if the deposits in employees provident fund India and Voluntary Provident Fund (VPF) exceed Rs. 2.5 Lakhs in a financial year, the interest earned on the contribution above Rs. 2.5 Lakhs will be taxable.
  • If no PF contribution is made towards the EPF account by the employer, the interest component will be exempt from tax up to the deposit of Rs. 5 Lakhs in that financial year.

EPF Grievance

The Employees Provident Fund Organisation India provides a grievance system for members to register their complaints. Here is how it works:

  • The members can click on the ‘Register Grievance’ tab available at the EPF portal EPFiGMS.gov.in to lodge their complaints.
  • Members will have to fill in all the details regarding their EPF account and the description of their grievance.
  • Members can also upload the relevant files related to their grievance on the site
  • Members can track the status of the grievance by clicking the ‘View Status’ tab.

Additional Info: Check Banglarbhumi West Bengal Land Record in detail.

PF Toll Free Number

For any doubts or discrepancies, you can contact at the following PF Toll Free number: 1800118005

Employee Provident Fund FAQs

How much PF is deducted from salary?

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12% of your salary goes towards contribution to PF deduction. Also, 1.75% will be deducted for Employee State Insurance Corporation (ESIC). Women employees can choose  provident fund deduction from salary of just 8% of their basic monthly salary for the initial three years.

What is the employer share in PF?

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Employer contribution to PF is 12% of the employee’s basic monthly salary to the EPF. For sick companies or establishments having less than 20 employees, the EPF deduction or contribution rate can be 10%.

What is the employee share in PF?

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The employee contribution to PF and the employer both contribute 12% each of the employee's basic salary towards the scheme.

Can an employee join EPF directly?

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No. Only employees of the companies registered under the EPF Act are eligible to invest in the EPF or PF. PF contribution of employee and employer is 12% each of the basic salary of employees and dearness allowance each month to the EPF account.

What are the criteria to withdraw EPF?

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You can withdraw EPF only under the circumstances mentioned below:

  • Resignation or quitting job: Employees are free to withdraw 75% of their EPF payment after one month of the date of resignation or quitting the job. The remaining 25% can be withdrawn after 2 months of unemployment.
  • Disability: If the employee is unable to work due to any disability then they may use their EPF funds to help them get over the difficult time.
  • Unexpected death: In case of sudden demise of the contributor/employee, the accumulated amount along with the interest is provided to their nominee. This helps the family sail through difficult times.
  • Lay-off: In the case of sudden layoffs/ retrenchment of employees from the job, this fund can be used until the time they get another suitable job.

What information is required to check PF status?

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  • UAN
  • Name & extension code (if required) of the company.
  • Employer’s EPF regional office.

What is the full form of PF?

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PF full form is Provident Fund.