Employees Provident Fund: All you Need to Know about EPF

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In India, If you already have an EPF account. You might have also heard about PF or EPF, which means the Employee Provident Fund. It is a government scheme to provide benefits of saving for each employee. This scheme also allows tax exemptions on the returns of up to Rs. 1.5 lakh. Besides, the interest rate given is 8.75%. The employee or company that you work for also contributes to your PF or EPF account. EPF savings helps employees in taking loans, or you can also withdraw them post-retirement. Therefore, understanding the Employees Provident fund for everyone is very crucial. In this article, we will learn about all the must-know things about EPF.

Understand EPF

EPF is a government scheme in which the employees contribute 12% of the basic salary + DA. The employer also equally contributes along with an additional 1.36% towards administrative charges.

It is mandatory for all the employees having a salary equal to or less than fifteen thousand. It is also compulsory for companies having more than 20 employees. Every employee who participates in EPF gets a UAN( Universal Account Number). Employees can withdraw EPF only after continuous service of at least five years.

Also, Most of the companies deduct some amount from your salary to contribute to the PF account on your behalf. The interest given to you is given on the total amount of your and your employee’s contribution.

Understand UAN(Universal Account Number)

It is a unique number that gets allocated to an employee having an EPF account.

This number is used as a unique identification to track and record an employee’s work profile. It also helps in transferring and withdrawing funds in PF or EPF accounts.

Benefits of Employees Provident Fund

EPF or PF is one of the most beneficial schemes by the Indian Government. It is profitable for both private and Government sector employees. EPF Registration is also mandatory and should be encouraged and followed by companies. Opening an EPF account is very easy, and one must always be aware of the latest updates related to Employee Provident Fund in India. Several significant benefits of EPF include-

  • EPF helps you in savings.
  • It also helps in a post-retirement lifestyle and funds your retirement.
  • Also, it helps to obtain tax exemption.
  • The interest rate is outstanding as compared to other schemes.
  • No need to make a one-time lump sum investment.
  • EPF use as a financial backup when you are unemployed.

How to apply for EPF or PF in India?

Applying for EPF is straightforward and generally completed by the employee. Once you are eligible for EPF, you have to submit the documents, which are as follows.

  • For Partnership Firm – Partnership Deed
  • For Public or Private Limited Company – Certificate of Incorporation, Copy of Memorandum(MOA) and Article of Association(AOA).
  • For Society – Registration Certificate of the Society and copy of rules and objectives of the society.
  • ITR Filing documents, PAN details of the company, partition deed, First sales invoice, copy of balance sheet, and employees’ salary.

How to perform PF calculations?

PF calculations are simple as you have only to follow the criteria set by the Government. The mandatory contribution is 12% of the basic salary + dearness allowance. Here the salary limit is 15 thousand only.

If the employees’ basic salary is more than 15 thousand, then the employees can cap the amount at a minimum of 12% of 15,000, which is only 1800.

Employees can also increase their contribution to 100% of their basic salary. In this case, it is known as VPF(Voluntary Provident Fund). However, the employer’s contribution remains constant at 12 % plus PF admin charges.

New EPF Rules will Change your Monthly Salary

In case, you need any kind of direction connected with the EPF Registration, please feel free to communicate with our business advisors at 8881-069-069.

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