Employee Provident Fund (EPF)

The EPF scheme, launched in 1951, caters to more than fifty million individuals. It is a welfare scheme governed by The Employees' Provident Scheme Act 1952, the Employees' Direct Linked Insurance Scheme Act 1976 and the Employees' Pension Scheme Act 1995.
 
EPF Employees’ Provident Fund is a savings scheme introduced by the Employees' Provident Fund Organisation and supervised by the Ministry of Labour and Employment, Government of India. The fund aims to facilitate a habit of savings among salaried employees and build a substantial retirement fund.
 
Under the scheme, the employer and employee contribute towards the fund. Interest periodically accrues on the investment amount. The corpus is available to the employee on retirement or exit from employment, subject to certain conditions. The schemes offered to extend to Indian workers. Additionally, workers from countries with signed bilateral agreements are eligible. In the case of a deceased employee, the dependents enjoy the scheme's benefits.

What is EPFO (Employee Provident Fund Organisation)?

The Ministry of Labour and Employment oversees EPFO, which was established in 1951. It provides insurance plans for both domestic and foreign workers.

The EPFO is a non-constitutional body that regulates and monitors provident funds in India. It is the world's largest social security organisation for the number of financial transactions and clientele.

Schemes Offered Under EPFO

Here are the schemes offered under EPFO:
 

• Employees' Provident Funds Scheme 1952 (EPF)
• Employees' Pension Scheme 1995 (EPS)
• Employees' Deposit Linked Insurance Scheme 1976 (EDLI)
• Universal Account Number (UAN)

Objectives of EPFO

The primary objectives of EPFO are as below:

1. Make certain each organization adheres to the rules and regulations laid out by the EPFO.
2. Digitize services provided by provident funds and improve the overall user experience.
3. Enhance the ease of compliance and encourage voluntary compliance.
4. Safeguard investors' rights and reduce the claim settlement period to three days.
5. Ensure every employee holds only one employee pf account and online access for each account.
6. Promotion of voluntary compliance and encouragement of it.

UAN and EPFO Portal

All EPF subscriber have online access thus you can visit the official website of EPFO and follow the given steps:

1. Enter the UAN number on the Member e-Sewa page for the EPFO member login.
2. Now give the password and write the displayed Captcha Code
3. Tap on 'Sign in' and view EPF account

Employee Provident Fund (EPF) Eligibility

EPF full form is Employees Provident Fund (EPF), a category of Provident Fund Schemes. EPF scheme is subject to certain eligibility criteria as below:

• All states in India can benefit from the provisions of the EPF scheme.
• EPF account registration is mandatory for salaried employees with an income of up to ₹ 15,000. 
• Employees with a salary of more than ₹ 15,000 may register for an EPF account subject to approval from the Assistant PF Commissioner.
• Organisations with more than 20 employees must register for the EPF scheme.
• Organisations with less than twenty employees may join the EPF scheme voluntarily.
• Employees are entitled to receive a variety of employee provident fund benefits, including insurance benefits and pension benefits, after they become active members of the EPF program.

EPF Interest

Note: For the Financial year 2023-24, the pre-fixed rate of interest offered by the EPF scheme is 8.15%.

The interest accrued on an investment in the PF account happens to be tax-free.

This type of interest is paid on operative PF accounts of the employees who are about to retire. However, the interest accrued on the accounts will be taxed as per the tax slab of the EPF employee member.

Note that the amount contributed toward the pension scheme doesn’t accrue the interest rate. But members are eligible for the pension as soon as they become 58 years of age. 

EPF Calculation?

EPF calculator is an online simulation that indicates the value of your EPF investment on retirement. The lump-sum investment includes your contribution, your employer's contribution, and accrued interest on the investment.

The EPF calculator requires inputs such as your current age, monthly remuneration, dearness allowance, EPF contribution and retirement age. You may also enter the current EPF balance if it is available. Using a preset formula, the calculator returns a future value of the EPF investment.

The calculator's purpose is to aid the employee's financial and retirement planning. It also allows you to try various permutations and combinations to arrive at the desired retirement EPF fund.

How Is Interest on EPF Calculated?

The interest on EPF (Employee Provident Fund) is calculated each month i.e. 12 months.

But it is credited to the account only on the financial year’s last day.

One can calculate the EPF interest by multiplying the closing balance per month with the PF interest rate & then divide it by 2.

EPF Form

EPF form needs to be filled by the employee who holds a PF account.

The fund is used for withdrawing the EPF amount at the retirement time or the employee quits the job.

Process of Transferring EPF Money

1. Visit the online transfer claim portal and request an EPF transfer with the same login credentials as the EPF member portal. Check your eligibility to initiate an online transfer claim.
2. If you are eligible, submit the claim online and provide details of your previous employment. These details include the EPF account number of your previous and current employer, the date of joining and leaving the previous employer and the date of joining the current employer.
3. Select either your current or previous employer for attestation. Authentication by the previous employer results in faster settlement.
4. On submission of the relevant details, you will receive an OTP on your registered mobile number. Track the application using the tracking ID issued to you. Additionally, take a printout of the form and submit it to the employer you choose for attestation.
5. EPF authorities are in the loop from the transfer initiation with the online transfer procedure. In the manual process, you must complete Form 13 and submit it to the employer.
6. The employer may take considerable time to submit the form to the EPF authorities. The EPFO is unaware of delays (if any) during the process. With online transfers, EPFO acts as a mediator and puts greater accountability on employers to sign off on time.
    

EPF Benefits

EPF is a welfare scheme that inculcates a habit of financial planning and savings among employees. Some of the benefits of EPF are as below:
 

1. EPF allows employees to take advances or make withdrawals in case of emergencies.
2. In case of the death of a member, the PF amount is payable to the nominees or legal heirs.
3. EPF encourages the employer to contribute towards the PF. It also promotes contributions towards the employee's pension. Therefore, it helps secure the employee's post-retirement finances.
4. Most importantly, any contribution to the provident fund is a deduction under income tax for the employer and employee. Further, interest on provident fund investment is exempt from tax.
5. Employees earn an attractive rate of interest on PF investment. Investment in PF is virtually risk-free.
6. Under the EDLI scheme, employees are eligible for life insurance in case of death while in service.
7. Lastly, EPFO allows for transfer in case of any change in employment without any exit load or impact on the total investment value.

EPF Withdrawal Process

Process of Withdrawal Online:

1. To withdraw EPF online, follow these steps:
2. Login to UAN Member e-Sewa portal
3. Choose the tab mentioning 'Online Services' & tap on the 'Claim (Form-31, 19 & 10C)'
4. Get the member details displayed on screen
5. Enter the bank account number registered with the EPF account & choose 'Verify'

Process of Withdrawal Offline:

1. Do you wish to withdraw the PF offline? You must visit the respective EPFO office. Submit the duly filled
2. Composite Claim Form. Note that there are two types of Composite Claim Form Non-Aadhaar and Aadhaar.
    

EPF TAX Rules

EPF interests and deposits were exempt from the tax until 2020. But after Budget 2021, the new rules were announced by the government that started FY22 when the deposits in VPF and EPF exceeded Rs 2.5 lakhs in one financial year.

So if you have decided to withdraw before completion of the 6 years then you will be taxed for the EPF.
Under Section 80 C of the Income Tax Act, contributions to the EPF are tax deductible up to Rs 1.5 lakh annually.

The interest earned above 2.5 lakhs is taxable. If there are no contributions made to the account, the interest component gets exempted up to Rs. 5 lakh deposit in the financial year. So, the Central Board of Direct Taxes or CBDT has already stated that the two separate PF accounts need to be maintained.

EPFO Information for Grievance

Employees who wish to register the grievance need to use the member site of the EPFO, where they may fill out the grievance registration form & make the complaint. Note that the employees file complaints frequently about their withdrawals, account transfers, PF settlements, and pension settlements. To get EPF grievance registration, one needs to follow the points below:
 

1. Visit https://epfigms.gov.in/ and access EPFO grievance website
2. On its top bar, one needs to tap on 'Register grievance.'
3. After this, the registration form gets displayed
4. One needs to fill out the form
5. Now, enter the current situation (i.e., Employer, employee, or EPS pensioner.)
6. After this, one has to fill up the PF account number.
7. Now, it is time to input the regional EPF office address
8. Enter the business name and address
9. Enter your name, zip code, address, phone number, country, email address and other details.
10. Now, you can file the grievance,
11. Upload the letter, enter the given captcha, and then complete the registration