No topic what the time frame is, each kid will look forward to the coming of holidays and plan and dream about all of the a laugh they’ll have. As we growth thru our schooling and age, we plan for upper schooling and school. Then our ideas will ultimately cross to our careers. When our school days recover from, we plan on settling down, on marriages, which is adopted by way of the plans for the circle of relatives. Once an individual reaches this actual degree, he’s going to get started interested by securing the way forward for the circle of relatives. For workers operating within the non-public sector, the Employee Provident Fund (EPF) is an overly well-known funding scheme with tax saving together with the opposite advantages.
Employee Provident Fund (EPF) is an important device whilst making plans for retirement.
What is Employee Provident Fund?
The Employee Provident Fund (EPF), presented underneath the Employees’ Provident Fund and Miscellaneous Act (1952), is a financial savings scheme. It is controlled and administered by way of the Central Board of Trustees, and it has representatives from 3 events that are the workers, the employers, and the federal government. The actions in this board are assisted by way of the Employees’ Provident Fund Organization (EPFO). EPFO is controlled during the Ministry of Labour and Employment and works underneath the direct jurisdiction of the federal government.
This scheme objectives at selling financial savings for use by way of the workers post-retirement within the nation. EPF is a number of finances which is contributed each month by way of the employer and the workers.
What is the Eligibility Criteria for the EPF Account?
- In order to avail some great benefits of the scheme, the workers will have to transform an lively member of the scheme.
- Since the day workers sign up for the group, they’re eligible for availing insurance coverage advantages, Provident Fund, together with pension advantages.
- EPF advantages can also be given to the employees in an organisation that workers at least 20 staff.
- This scheme does now not cater to the folk residing in Jammu and Kashmir.
Employee’s and Employer’s Contribution against EPF
The employer could make a minimal contribution, an quantity of Rs. 15000 at a price of 12%. They may even voluntarily give a contribution much more. This quantity can be equivalent to Rs. 1800 each month. This implies that the worker and the employer can give a contribution Rs. 1800 every each month against the scheme. At first, the volume set used to be Rs. 6500 at 12% which is the same as Rs. 780 which can be contributed by way of each the worker and employer.
Benefits of EPF Account
Here are some superb epf advantages for staff.
1. Tax-Free Savings
The EPF scheme supplies explicit rates of interest at the deposits at sure charges which can already be made up our minds by way of the group. The Indian executive deems each the real deposited quantity and the volume of hobby won at the deposits to be totally tax-free. Any form of withdrawal made at publish finishing touch of five years or adulthood of getting availed the sure scheme is totally tax-free. However, it’ll now not be freed from tax in case you withdraw the deposited quantity in advance (i.e. earlier than the Five years final touch). This characteristic of the scheme will lend a hand the worker obtain higher advantages which can be within the type of further source of revenue to his financial savings. This can be within the type of hobby.
2. Long-Term Financial Security
Funds which might be deposited in this sort of account can’t be simply withdrawn by way of the individual, and subsequently, it is helping to make sure financial savings.
3. Resignation/ Quitting the Job
The worker can withdraw 75 according to cent of the EPF fund after resignation after a month of the date he/she give up the task. The last 25 according to cent can also be taken 2 months after being unemployed.
4. Unseen cases
The worker can use the accrued fund in case of any form of emergency. The worker can come to a decision to withdraw the fund in advance. The scheme lets in for such untimely withdrawal in particular explicit instances.
5. Income/ Unemployment Loss
There may well be some instances the place the worker loses the task they recently have as a result of any reason why. During those occasions, the finances can be utilized to satisfy that particular person’s bills.
In case the worker passed on to the great beyond, the amassed quantity together with the hobby is given to the nominee of the worker. These epf advantages after demise will lend a hand the circle of relatives get during the tricky occasions.
In instances of surprising retrenchment or layoffs from the task, this fund can be utilized by way of the individual till that particular person will get any other solid task. This is any other epf tax get advantages.
8. Disability of the Employee
If the worker can not paintings anymore or isn’t the placement of operating, then that particular person will be capable to use the finances and those finances can lend a hand the individual get thru their difficult time.
9. Long Run Savings
This scheme is complete evidence and protected for people that need to have investments ultimately.
10. Retirement Period
The fund this is accrued underneath the scheme can be utilized by way of the worker on the time of his retirement. In the type of financial safety, this scheme will supply reduction to the worker this is retired. Almost everyone will to find the epf retirement advantages very helpful.
11. Liquidity of Funds
At an hour of monetary disaster, this scheme will act as any other supply of source of revenue for the person. The finances which might be got like this can be utilized to satisfy unavoidable bills like schooling wishes or drugs wishes.
12. Pension Scheme
The employer additionally makes important contributions against the pension of the worker and contributes against the PF fund which can be utilized by way of the worker after retirement. Epf pension advantages are very helpful.
13. Accessible All Over
When you may have the Universal Account Number (UAN), the workers will be capable to get right of entry to their PF account simply by way of the EPF member portal. This approach they’ll be capable to switch their accounts each time they wish to shift their present jobs.
14. Insurance scheme
This act supplies for some provisions the place the employer of the group is needed to give a contribution against the lifestyles insurance coverage of the worker, however the crew insurance coverage over might not be provide. This scheme thus makes certain that all of the workers are insured correctly.
15. Special Occasions
When you want cash for particular events like for a marriage, schooling for kids, self, or sibling, then you’ll be able to withdraw as much as 50 according to cent contributions out of your account. The member is permitted those advantages for thrice. To get right of entry to those advantages, the member will have to have served for a minimum of a time frame of 7 years. The participants will have to even have the right kind paperwork for the occasions.
Members can make a choice from their account for repairs of a area, area restore, or for the reimbursement of loans you will have taken to get the home.
Here are some commonplace questions other people may have.
1. How is EPF Different From PF?
PF is the preferred title for Employee Provident Fund or EPF.
2. What is UAN?
Universal Account Number (UAN) is a 12-digit quantity which is exclusive for each member who registers with the EPFO. This distinctive quantity is related with the member’s PF account.
3. What is The Current Interest Rate on EPF?
The present charges the place the worker contributes is 12% of the fundamental wage together with dearness allowance every month. The employer additionally contributes 3.67% against EPF and eight.33% against EPS to the worker’s account.
4. How to Calculate Interest Rate on EPF?
EPF hobby is deposited to the account on the finish of annually regardless that they’re calculated each month. Check out this following instance:
Dearness Allowance+ Basic Salary= Rs. 15000
Employee’s contribution= 12% of Rs.15000= Rs.1800
Employer’s contribution= 8.33% of Rs.15000=Rs.1250
Employer’s contribution= Employee’s contribution – Employer’s contribution= Rs.550
Total EPF contribution (each month)= Rs.1800+ Rs.550= Rs.2350
Interest price between 2017 and 2018 used to be 8.55%
So, when calculating the hobby, the hobby appropriate every month= 8.55% /12= 0.7125%
Let’s suppose that the worker joined the carrier on April 1, 2017. The contributions get started from April 2017-2018
Total EPF contribution for the month April= Rs.2350
Interest at the EPF for month April= Nil
EPF Account stability (finish of month April)= Rs. 2350
Total contribution for month May= Rs. 4700
Interest at the contribution for month May= Rs.4700 * 0.7125%= Rs.33.49
5. How to Check EPF Balance?
A member can test the stability on-line by way of those easy steps:
- Visit the EPF’s website online at www.epfindia.gov.in
- Click at the “For Members” you are going to to find within the “Our Services” segment.
- Select “Member Passbook” choice.
- Enter the “UAN”, password, and the captcha code to login for your account.
- Select “Member ID” to peer your passbook.
- Your passbook will display the main points within the paperwork.
You may additionally test your stability by way of sending a message within the layout EPFOHO <UAN> ENG to 7738299899.
You may test by way of sending a overlooked name to the quantity 011-22901406
6. Is There Any App for EPF Services?
Yes. Services can also be equipped by way of the EPF for cellular customers during the Umang app. This app has 5 sections:
- Employee-centric Services
- General Services
- Employer Centric Services
- Pensioner Services
- eKYC Services
7. After Switching Company, Should I Withdraw EPF Account or Transfer My Funds?
It is very best in case you transferred your finances from the former PF account to the present one. If the volume is withdrawn inside of Five years, the volume can be taxed, and it will have to be discussed underneath the source of revenue whilst submitting for ITR.
8. Can I Withdraw My EPF Account If I’m Unemployed?
Yes, after one month of employment you might be allowed to withdraw 75% of your EPF. If you might be nonetheless ceaselessly unemployed for two months, then you’ll be able to withdraw the rest 25% of your EPF fund.
This is a tax-free hobby, and the adulthood will make certain that your cash sees excellent expansion. When you proceed this scheme for an overly longer term, then it assist you to with assembly your retirement objectives. You can even be capable to fulfil your different emergencies and objectives as a result of on occasion, we may well be quick on finances. At those moments, EPF can transform very useful as a result of the advantages they supply which many people are blind to.