WHAT IS EMPLOYEES PROVIDENT FUND?

What is Employees Provident Fund?

The Employees Provident Fund (EPF) is a crucial component of the retirement savings structure for employees in India. Managed by the Employees Provident Fund Organisation (EPFO), this mandatory social security scheme aims to ensure financial security for employees after retirement, promoting a stable economy through saving.

EPF Contribution and Calculation

Under the EPF scheme, both employers and employees contribute to the EPF account. Employers are mandated to contribute 12% of the employee's basic salary plus dearness allowance each month. Similarly, employees are required to contribute 12% of their basic salary plus dearness allowance towards their EPF accounts.

From the total contribution, 8.33% of the employee's contribution is allocated to the Employees Pension Scheme (EPS), also administered by the EPFO. This collaboration emphasizes the joint effort in building a secure future for employees.

The total EPF contribution is thus calculated based on the following:

• Basic Pay + Dearness Allowance
• The contribution rate of 14.67% is applicable, considering either the total wages or a cap of ₹15,000, whichever is lower.

It's essential to grasp the structure of basic salary in India as it forms the basis for calculating the contributions to the EPF account.

"The EPF is not just a scheme, but a secure investment in your future."

EPF Interest Rates and Taxation

The EPF offers competitive interest rates and is an attractive option compared to many other investment avenues. The EPF interest rate is decided and revised annually by the Central Government in collaboration with the EPFO. For the fiscal year 2020-21, the interest rate was set at 8.50%.

Moreover, employers and employees enjoy certain tax benefits; contributions to the EPF are partially or fully tax-exempt under the Income Tax Act of 1961. However, it's important to note that TDS is applied at a 10% rate for any withdrawal made after five continuous years of service.

What Are the Online EPF Services?

The EPFO provides an array of online services designed to assist employees with their EPF needs. Here’s a glimpse of what these services include:

• Access to EPF account statements online
• Viewing contribution details and interest rates
• Transferring EPF accounts to a different establishment
• Filing claims for disbursement of EPF balances
• Updating personal information and viewing nominations

These services are a testament to how technology is transforming HR functionalities, ensuring employees have control and insight over their savings.

FAQs

What should I do if I forget my EPF login password?
You can reset your EPF login password by visiting the unified portal of the EPFO. Select the 'forgot password' option, and follow the instructions for identity verification. A new password will be sent to your registered email or mobile.

How can I change my registered mobile number for EPF login?
To change your registered mobile number, visit the unified portal of the EPFO, click on 'change contact number,' enter the new details, and verify through the OTP sent to your new number.

What is the difference between UAN and EPF login?
UAN, or Universal Account Number, is a unique identifier assigned to each EPF account holder, while EPF login refers to accessing the portal using a username and password. The UAN streamlines managing multiple accounts, whereas EPF login provides access to specific account details online.

Conclusion

The Employees Provident Fund is not merely a retirement scheme but a foundation of financial security for millions of employees in India. Understanding its intricacies—from contributions and calculations to interest rates and online services—is vital for effective financial planning.

For those navigating the EPF system, leveraging the available online services can significantly ease the management of contributions and provide clarity on one's financial future.