Employees Provident Fund

The Role of EPFO

The Employees' Provident Fund Organisation (EPFO) is a non-constitutional entity under the Ministry of Labour and Employment, India. Instituted in 1951, it administers EPF schemes for both Indian and international workers through bilateral agreements. The EPFO facilitates streamlined compliance, promotes universal account ownership, and champions accessible online services for members.

Features and Objectives

EPFO boasts multiple features and objectives, such as:

• Universal Account Number (UAN): Each member receives a 12-digit UAN, facilitating access to online PF services.
• Claim Settlement: EPF claims have been expedited, reducing settlement duration from 20 to 3 days.
• Voluntary Compliance: The organization emphasizes voluntary compliance, encouraging adherence to EPF regulations.

EPF Schemes

EPF contributions encompass various schemes, including:

• Employees' Provident Funds Scheme 1952 (EPF) - Mandatory for employees earning less than Rs. 15,000 per month.

• Employees' Pension Scheme 1995 (EPS) - Provides pension benefits based on service years and average wages.

• Employees' Deposit Linked Insurance Scheme 1976 (EDLI) - Offers life insurance to members with a minimum service period.

EPF Contribution

The Employee Provident Fund (EPF) is a vital component of an employee's financial security, and its contributions are a shared responsibility between the employer and the employee. Here's a detailed breakdown of the contributions:

Employer's Contribution:

Employee's Contribution towards Employee's Provident Fund (EPF)

Employer's Contribution towards EPF:

Universal Account Number (UAN)

Employers usually provide the UAN during the onboarding process. However, if you face difficulties, you can retrieve it from the UAN portal by using your member ID or from your employer.

Online Services and Digital Initiatives

EPFO offers a gamut of online services, simplifying member interactions:

• UMANG App - Allows UAN holders to manage their PF account, update profiles, view passbooks, and more.

• Online Withdrawal - Facilitates hassle-free EPF withdrawals with UAN activation and linked Aadhaar and bank details.

• EPF Passbook and Grievance Redressal - Accessible through the EPFO portal, enabling tracking of PF transactions and submitting grievances.

PF Contribution Structure and Benefits

The PF contribution structure entails:

• Employee's Contribution: 12% of the employee's salary is deducted monthly and directed toward the EPF account.

• Employer's Contribution: Employers also contribute 12% of the employee's salary to the EPF.

EPF benefits encompass:

• Long-term Savings - EPF cultivates disciplined savings over an individual's working life.

• Emergency Assistance - Partial withdrawals are permitted for specific purposes, aiding during emergencies.

• Retirement Security - EPF serves as a retirement corpus, sustaining a comfortable post-retirement lifestyle.

EPF Interest Rate and Eligibility

The EPF interest rate for 2023-24 stands at 8.15%. Eligibility criteria encompass:

• Mandatory for Salaried Employees: Employees earning less than Rs. 15,000 per month must register for EP.
• Organizational Requirements: Organizations with more than 20 employees must register for EPF, while smaller establishments can do so voluntarily.

EPF Withdrawal Rules

Complete EPF Withdrawal Complete withdrawal of the Employee Provident Fund (EPF) can be done under specific circumstances:

1.On Retirement: When an individual retires from employment, they are eligible to withdraw their entire EPF balance

2.Unemployment Period: If an individual faces unemployment for a period extending beyond two months, they can opt for complete EPF withdrawal.

3.Job Transition: During a job switch or when transitioning between professions, an individual can withdraw the full EPF balance. However, the period without employment should exceed two months.

Partial EPF Withdrawal Partial withdrawals from EPF are permitted under certain circumstances:

1.Wedding Expenses - EPF can be partially withdrawn to cover wedding expenses, helping individuals meet the financial requirements of this significant life event.

2.Higher Education - Partial withdrawal is allowed for funding higher education expenses, ensuring access to quality education.

3.Land Purchase or House Construction - EPF funds can be used partially for the purchase of land or construction of a house, facilitating property ownership.

4.Home Loan Repayment - Individuals can opt for partial EPF withdrawal to repay a home loan, reducing their financial burden.

5.Property Renovation - Partial withdrawals are also permitted for renovating a housing property, maintaining and improving the living conditions.

EPF Withdrawal Process

Online EPF Withdrawal

• Step 1: Ensure you have an active Universal Account Number (UAN).
• Step 2: Make sure the mobile number linked to your UAN is active.
• Step 3: Link your UAN with Aadhaar, and have your PAN and bank details (along with the IFSC code) ready.
• Step 4: Log into the UAN online portal.
• Step 5: Verify your KYC details and follow the on-screen instructions to initiate the online EPF withdrawal process.

Offline EPF Withdrawal

• Step 1: Visit the EPFO office and obtain and fill out either a 'New Composite Claim Form' or a 'Composite Claim Form.'
• Step 2: Submit the completed form to the EPFO office that has jurisdiction over your employment location.
• Step 3: Ensure that the Composite Claim Form is attested by your employer.

Ways to Check Your EPF Balance

You have multiple methods to conveniently check your EPF balance:

1.EPFO Portal - Accessing your EPF balance through the EPFO member portal is straightforward. Log in using your UAN and password. Once logged in, you can view your EPF balance under the member ID.

2.UMANG App - Download the Unified Mobile Application for New-age Governance (UMANG) app for mobile EPF balance checks. This app also allows you to initiate and track claims seamlessly.

3.Missed Call Service - Verify your EPF balance by giving a missed call to 011-22901406 from your registered phone number.

4.SMS Service - If your UAN is active, send an SMS to 7738299899 for EPF balance inquiries

Process to Reactivate a Dormant EPF Account

A dormant Employee Provident Fund (EPF) account can be a missed opportunity to harness your funds. If you have an unclaimed account and wish to liquidate it, follow these steps:

EPFO KYC and Unclaimed Funds

EPFO provides a streamlined KYC update process for members, allowing them to link Aadhaar, PAN, and more. Unclaimed EPF funds can be withdrawn through a straightforward process, usually taking 3 to 20 days for disbursal.

A dormant Employee Provident Fund (EPF) account can be a missed opportunity to harness your funds. If you have an unclaimed account and wish to liquidate it, follow these steps:

1. Access the EPF Helpdesk Website: Go to the EPF Helpdesk website.

2. Navigate to the 'For Employees' Section: Select the 'For Employees' section on the website.

3. Choose 'Inoperative A/c Helpdesk': Within the 'For Employees' section, click on 'Inoperative A/c Helpdesk'.

4. Proceed as a First-Time User: You will be directed to the helpdesk page. Click on '(a) First Time User Click Here to Proceed'.

5. Describe the Inactivity Reason: In the 'Problem Description' section, provide reasons for the inactivity of your EPF account.

6. Enter Relevant Details: On the next page, provide all your relevant details, including your EPF number, company name, and more. Then, click on 'Next'.

7. Provide KYC Information: Enter your KYC details such as Aadhaar number, PAN number, bank account number, and IFSC code.

8. Generate PIN: Click on 'Generate PIN', which will trigger a notification saying 'PIN successfully sent to your mobile'.

9. Verify PIN and Submit: Enter the PIN received on your mobile and click on 'Verify PIN and Submit'.

10. Acknowledgement and Reference ID: After submission, you will receive an SMS containing your reference ID, and an 'Acknowledgement' will be displayed on your screen.

11. Check Application Status: To check the status of your application, log in to the Helpdesk as a registered member. Enter the information requested on the reference number and mobile number.

12. Field Officer Assistance: Your request will be transferred to a field officer who will get in touch with you to guide you through the further steps.

How to Transfer EPF Money in Case of Job Change

Taxation of EPF

• EPF withdrawals before 5 years of employment are subject to taxation.
• Investment in EPF is tax-deductible, with a yearly limit of Rs 1.5 lakh under Section 80C of the Income Tax Act, applicable to both employer and employee contributions.
• Interest earned on EPF is tax-free unless the account holder becomes unemployed.
• EPF withdrawals are tax-free if made after 5 years of opening the account; however, if the withdrawal amount exceeds Rs 50,000 within this period, TDS is deducted.

FAQs on Employees Provident Fund