The provident fund in India, also known as the Employee Provident Fund (EPF), is a compulsory savings scheme for employees. Both the employer and employee make monthly contributions to the fund, which accumulates over time with interest. The EPF aims to provide financial security to employees after retirement or during periods of unemployment. The accumulated amount can be withdrawn upon retirement or under specific circumstances, subject to certain rules and regulations. It helps employees save for the future and ensures financial stability during their working years.
BENEFITS
RETIREMENT SAVINGS
EPF serves as a long-term savings instrument, helping employees build a retirement corpus. The contributions made by both the employee and employer, along with the accrued interest, provide a financial cushion for post-retirement life.
FINANCIAL SECURITY
EPF ensures financial security by creating a savings pool that can be accessed in times of need. It offers a safety net during periods of unemployment, medical emergencies, or other unforeseen circumstances.
EMPLOYER CONTRIBUTIONS
Employers are required to contribute an equal amount to the EPF, effectively increasing the savings pool. This additional contribution helps employees accumulate a larger corpus over time.
INTEREST EARNINGS
The EPF contributions earn interest, which is periodically declared by the government. This interest helps grow the accumulated amount and enhances the overall savings.
TAX BENEFITS
EPF contributions are eligible for tax deductions under Section 80C of the Income Tax Act, up to a specified limit. Additionally, the interest earned and the amount withdrawn after completion of a specific period are tax-exempt.
WITHDRAWAL FLEXIBILITY
EPF allows partial withdrawals for specific purposes like marriage, education, home loans, and medical emergencies. This flexibility enables employees to address immediate financial needs while still maintaining a portion of the savings for the long term.
HOW TO CHECK EPF BALANCE?
To activate their UAN online and check their EPF balance, employees can follow these steps:
- Visit the official EPFO website at https://unifiedportal-mem.epfindia.gov.in/memberinterface.
- Fill in all the required fields, including UAN, Member ID, Aadhaar number, PAN number, and other necessary details.
- Enter personal information such as name, address, and phone number. Complete the form by entering the captcha displayed on the screen.
- After submitting the information, the employee will receive an OTP (One-Time Password) on their registered mobile device.
- Validate the OTP received and proceed to activate the UAN.
ELIGIBLE CRITERIA
- Factory with 20 or more employees: Organizations operating as factories with a total employee strength of 20 or above are eligible for PF registration.
- Establishment with 20 or more employees: Any establishment employing more than 20 persons is eligible for PF registration. The specific class of firms falling under this criterion is defined by the Central Government.
- Establishment with less than 20 employees and compulsory notification: If an establishment has less than 20 workers, it can still be eligible for PF registration if it has been notified of compulsory registration for a period of not less than 2 months.
- Companies with less than 20 employees: Companies with fewer than 20 employees are also eligible for PF registration. However, they must issue a notice to the Employees’ Provident Fund Organization within 2 months or less, expressing their intent to register.
REQUIRED DOCUMENTS
To complete the online PF registration process, businesses are required to provide the following mandatory documents:
- PAN card of the establishment: A copy of the Permanent Account Number (PAN) card of the organization applying for PF registration.
- Certificate of incorporation: The certificate of incorporation issued by the Registrar of Companies (RoC) or any equivalent registration document for the establishment.
- Cross-cancelled cheque of the establishment: A cancelled cheque that clearly shows the name and bank account details of the establishment.
- Address proof in the name of the establishment: Documents serving as proof of address for the establishment, such as a rent agreement, water bill, electricity bill, or telephone bill.
- Specimen signature of directors and authorized signatories: Signature samples of the directors and authorized signatories of the establishment.
- DSC (Digital Signature Certificate) registration of the authorized applicant: The DSC registration of the authorized individual who will be submitting the PF registration application.
- Consent of the majority of employees (in case of voluntary registration): If the establishment is applying for voluntary PF registration, a consent document from the majority of employees must be submitted.
STEPS TO MERGE PF ACCOUNTS
Here is a simplified version of the steps to merge PF accounts:
- Log in to the EPFO member portal using your UAN number, password, and captcha code.
- Go to the Service History page and ensure that the 'DOE EPF' (Date of Exit from previous employer) is updated for your previous employment details.
- Access the table on the page and copy the Member ID of your previous employer.
- Under the Online Services section, select the 'One Member-One EPF Account' option to merge with your existing employer.
- Choose 'Present Employer' in the attestation and paste the Member ID of your previous employer in the 'Get Details' section.
- The EPFO portal will display results. Select the checkbox, trigger an OTP, enter the OTP received, and submit the PF transfer request to your present employer.
- To track the PF transfer request, click on 'Online Services' and then 'Track Claim Status'. Wait for the Field Officer to validate and approve the transfer request to merge your PF accounts.
FAQs
You can check your EPF balance by visiting the official EPFO website, using the UAN portal, or through the EPF mobile app. You can also check it by giving a missed call or sending an SMS from your registered mobile number.
Yes, you can withdraw your EPF before retirement in certain circumstances such as resignation, unemployment for more than two months, medical emergencies, education, marriage, or purchasing a home.
The EPF interest rate is determined by the government of India, in consultation with the Central Board of Trustees of the EPFO. The rate is revised annually and is based on the performance of the EPF investments.
Yes, you can nominate a person to receive your EPF savings in the event of your demise. You can update your nomination details through the EPFO portal.
Yes, you can transfer your EPF when changing jobs. You can initiate the transfer process by submitting a transfer request online through the EPFO portal or by using the UAN portal.
EPF withdrawals are generally tax-exempt if the withdrawal is made after five years of continuous service. However, if the withdrawal is made before completing five years of service, it may be subject to taxation.
The current contribution rate for EPF is 12% of the employee's basic salary, dearness allowance, and retaining allowance (if any). The employer also contributes an equal amount.
Generally, EPF withdrawals are allowed after retirement, resignation, or termination. However, in specific cases such as medical emergencies or financial hardships, partial withdrawals may be permitted while still being employed.
EPF (Employee Provident Fund) is a mandatory savings scheme where both the employee and employer contribute, while EPS (Employee Pension Scheme) is a pension scheme where the employer contributes a portion of the employee's salary towards the employee's pension.
Yes, you have the option to voluntarily contribute more than the mandatory amount to your EPF account. These additional contributions are called Voluntary Provident Fund (VPF) contributions and can help you increase your EPF savings.