All about EPF
Employee’s Provident Fund (EPF) is a retirement benefits scheme that’s available to all salaried employees. This fund is maintained and overseen by the Employees Provident Fund Organisation of India (EPFO) and any company with over 20 employees is required by law to register with the EPFO.
Provident Fund Deduction from Salary:
When you start working, you and your employer both contribute 12% of your basic salary (plus dearness allowances, if any) into your EPF account. The entire 12% of your contribution goes into your EPF account along with 3.67% (out of 12%) from your employer, while the balance 8.33% from your employer’s side is diverted to your EPS (Employee’s Pension Scheme). It’s important to note that if your basic pay is above Rs. 6,500 per month, your employer can only contribute 8.33% of 6,500 (i.e. Rs. 541) to your EPS and the balance goes into your EPF account.
Interest on EPF:
The compound interest that’s decided upon by the government and central board of trustees is paid on the amount standing to the credit of the employee as on the 1st of April every year.
While your contributions are made monthly, the interest is calculated yearly. At the start of every year, you have an opening balance (which is the amount accumulated till that point). Your opening balance for the next year would be: opening balance + total monthly contributions + interest on the (old opening balance + contribution) .
Tax Benefits:
The employer contribution to your EPF is tax-free, and your contribution is tax-deductible under Section 80C of the Income Tax Act. The money you invest in EPF, the interest earned and the money you eventually withdraw after the mandatory specified period (5 years) are exempt from Income Tax
Money gets credited for me into an account. When can I withdraw it?
There are ways that you can navigate your way out of the mandatory 2 month waiting period if you want your EPF amount immediately. Employees planning to settle abroad, or those who have landed jobs in a foreign country are eligible to receive PF withdrawal immediately after registration. You’ll need to submit proofs like a copy of your VISA or employment letter, as the case may be.
A lesser-known waiver to the waiting period is that a female employee can withdraw her PF money if she is leaving service for the purpose of getting married. The proof for submission here can be your marriage certificate or even your wedding invitation card. You can withdraw a portion of your EPF savings for the purpose of:
- Marriage or education of yourself, your siblings, or children.
- Addressing emergency medical expenses for yourself, spouse, children, or dependent parents.
- Repaying housing loans for a house owned by you, a spouse, or jointly by both of you. You can do this only after 10 years of service and contribution to EPF.
- Paying the costs of alterations/repairs to your existing home. You’ll need to have been in service and contributing for 5 years for alterations and 10 for repairs.
- If you’ve completed 7 years of service, you can withdraw 50% of your EPF contribution up to 3 times in your working life.
EPF customer care
For those employees wishing to make queries regarding their PF account, be a delay in a claim being raised, discrepancies with regard to their contributions, inability to make a withdrawal and so on, the EPFO has a dedicated customer care service. For the those who are new to the EPF, follow the steps to find the EPFO’s customer care toll-free number:
- Log on to the EPFO’s member portal
- On the top of the page, click on the ‘Contact Us’ button
- Once you have done that, the EPFO’s customer care toll-free number will be displayed – based on the region the employer is located in.
EPFO grievance
For employees who want to register a grievance, the EPFO has a dedicated part of their member portal for employees to fill in a grievance registration form and file a complaint. Employees usually face grievances with regard to withdrawals, PF settlements, transfer of accounts, settlement of pension and so on. For those who are new to the EPFO’s member portal, follow the steps to register a grievance:
- Visit the EPFO’s member portal – http://www.epfdelhi.gov.in/grievances.asp
- On the bottom of the screen, click on ‘EPF grievance system’.
- The page will then be directed to the EPFO’s grievance management system. On that page click on ‘Register grievance’ on the top bar.
- Once you have done that, the grievance registration form will be displayed.
- Now, fill in the registration form:
- Enter your status (Employer, employee, EPS pensioner)
- Enter your PF account number
- Then, enter where your regional EPF office is located
- Next, enter the name of your establishment and the address of your establishment
- After that, enter your name, address, pin code, country, phone number and email ID.
- The last part is to enter the grievance category – whether it is a transfer or withdrawal related issue, a pension settlement issue, etc. Select your grievance from the drop down bar.
- Upload your grievance letter, enter the captcha and submit your grievance registration.
