EPF or Employee Provident Fund – Concept, Eligibility, Benefits, Interest Rate, Registration & more

EPF or employee provident fund is one of the most popular schemes. It is an EPFO initiative under the guidance of the Government of India.

The main aim of the scheme is to inculcate saving habits among salaried class people.

The saving helps them to build a substantial retirement corpus. As of now, the scheme serves to at least five crore people.

The three different acts of the scheme include the Employees’ Provident Fund Scheme Act, 1952, the Employees’ Deposit Linked Insurance Scheme Act, 1976, and the Employees’ Pension Scheme Act, 1995.

Every month, the employee and employer contributions to the scheme. Both the employer and the employee contribute 12% of the employee’s salary as the share towards the scheme.

The employee fund organization controls it, and it offers a fixed rate of return. Investors need to know that the interest offered on the scheme is tax-free.

You can invest in the scheme by visiting the official portal. The best part about the portal is that it’s tax-free, and while withdrawing, also you don’t have to pay it.

Additionally, the EPF portal is relatively easy to use, and it ensures services flow in a transparent way.

About EPF or Employees Provident Fund

The Employees’ Provident Fund (EPF) is a savings scheme. It was introduced under the Employees’ Provident Fund and Miscellaneous Act, 1952.

The central Board of Trustees features representatives from three parties, including the government, the employers, and the employees manage it.

The EPFO works under the guidance of the Government of India. Ministry of Labour and Employment manages it.

The nominee or the legal heir of the employee post his death can withdraw the interest amount.

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What are the eligibility criteria for investing under EPF?

The employees from both public and private sectors can apply under the scheme. In simple terms, all the employees across the country can apply for this scheme.

An organization is liable to extend EPF benefits to the employees if the organization hires at least 20 people.

Members who become active members of the scheme are eligible to avail benefits of the scheme.

The benefits most likely include Employees Provident Fund benefits, insurance benefits, and pension benefits.

Check out all Govt. Savings Scheme available for Investment

Benefits of investing in EPF or Employee Provident Fund

Towards the EPF members, the EPF offers a plethora of benefits. It gives them financial security and stability.

Capital Appreciation

Under this scheme, the investors can get a pre-fixed interest on the deposit. Furthermore, the rewards gathered until maturity assures capital appreciation.

Above all, the employees can surely see growth in their funds.

Retirement Corpus

The sum that an employer contributes, in the long run, is most likely directed towards the Employee pension scheme.

In the long run, the employees can build an excellent retirement corpus. The corpus gives some financial security and independence to the employee’s post-retirement.

Corpus for an Emergency

No doubt uncertainties come along in life but being financially prepared during emergency situations gives you peace of mind.

Thus, you can count on the EPF fund as an emergency corpus.

Tax Saving

An employee’s contribution under the EPF scheme is eligible for tax exemption. Above all, earnings are eligible for tax exemption.

You can avail of such exemption up to Rs.1.5 lakh. Thus, with such fantastic tax benefits in the long term, the scheme improves a person’s purchasing power.

Easy Premature Withdrawal

Members of the scheme are eligible to avail of partial withdrawal.

Employees can withdraw funds from the EPF accounts to meet specific goals, including building a house, pursuing higher education, or availing of medical treatment.

Learn everything about Retirement Planning here

Interest Rates for EPF or Employee Provident Fund

The current interest rate available under the scheme is 8.5%. The accumulated fund completely avails of tax exemption.

The interest rate applicable under the scheme is valid for that particular year that is from April of this year to March of next year.

The account becomes dormant or inoperative if an individual fails to make any contribution for thirty-six months.

No interest is offered on the amount deposited inactive accounts of retired members. As per the taxable slate rate, the interest earned is taxable.

The members are not eligible to get any interest under the Employee’s Pension Scheme. But members are eligible to earn pension after they turn 58 years old.

How can you register for EPF?

1st Step – You need to visit the official portal of EPFO.

2nd Step – Then, you need to visit the establishment Registration’ section, which takes you to a new page of the instruction manual.

The page will explain the process of registration and post that follow the digital signature certificate.

3rd Step – You can fill in the details to register after you accept the instruction manual.

4th Step – Then you will also receive an email link and mobile PIN on your registered mobile number. Lastly, you can upload the essential documents to register.

5th Step – If your registration is done earlier, you can also use the Universal Account Number (UAN).

When can you withdraw your EPF?

As a member of EPF, you can either choose full or partial withdrawal. But the main catch here is you can withdraw under only some circumstances.

You can withdraw completely on your retirement if your unemployment tenure is more than two months.

Additionally, you can choose to withdraw partially for a wedding, repayment of the loan, constructing a house, etc.

Process of EPF withdrawal

If you want to withdraw money under the EPF account, you can either do it online or offline.

Offline Process

Under the offline process, you need to fill up the claim form or composite claim form and submit it to the EPFO jurisdiction. The employer needs to attest to the composite claim form.

Online Process

If you want to go for the online process, then you need to ensure you have an active Universal Account Number (UAN). The registered mobile number also needs to be active.

The UAN and aadhar must be linked. You will need the PAN and respective bank details with its IFSC code.

After having all the information, you can log in to the official portal. Members also have to verify the KYC details.

How to know about EPF Claim Status?

The EPF claim status is most likely known as the recent data available about the applicant’s withdrawal.

The best part about this status is that it can help you get some insight into the claim process development.

If there are any delays during the process, then applicants can easily prepare for the same. You can check the PF status in different ways.

Who are eligible to make the EPF claims?

Post-Retirement– Members above the age of 55 can claim the entire amount of EPF. If members are retired early then, they are not eligible under this corpus.

Prior to Retirement– If employees plan to retire after a year, then employees in the age bracket of 54 years can claim at least 90% of the EPF amount.

Underemployment Situation– Members can claim up to 75% of their EPF corpus if the unemployment tenure is more than one month.

But once they get a new job, they need to transfer 25% of the same to the account. You need to note that an option to cancel the claim status doesn’t exist at all.

What is an EPF form?

From registration, PF transfer, withdrawal to availing loans, the Employee Provident Fund forms plays a crucial role for almost all activities under the EPF account.

Some of the necessary forms under the EPF account include:

EPF form 5 – The companies need to fill this form on a monthly basis. It basically gives notification to the EPFO about the new employees.

Organizations need to submit the details to ensure if the employees can avail benefits or no. The form is applicable only for new employees.

Under this form, employees have to fill in some necessary details, including the address and code number of the company, name of the employee, etc.

You can submit the form to the region’s EPF commissioner.

EPF form 10c – The person needs to file EPF form 10c when an individual retires from a company.

EPF form 31 – You need this form if you want to claim partial withdrawal of funds from the EPF account. Under the form, the members need to mention the reason for withdrawal.

After applying for the form, employees need to wait until employers accept the request. Subsequently, the fund is credited to the bank account.

Conclusion – EPF or Employee Provident Fund

The main of the employee provident fund scheme is to allow individuals to become financially secure and stable for their post-retirement life. It is mainly because it is a retirement oriented scheme.

If it is not necessary, then individuals must avoid premature withdrawals. The scheme also aims to encourage the habit of savings among people.

Both the balance and interest under the EPF account are tax-free. With a single UAN number, you can easily manage the EPF account.

By accessing the portal, you can apply to a plethora of services of EPF India. Thus, you can choose to invest in this scheme as it offers incredible benefits.

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