Are you in Job!! If yes, than you must have heard or even holding an account of Employee Provident Fund (EPF). The EPF is maintained solely by the Employees’ Provident Fund Organization of India (EPFO). As per the act, any company employing more than 20 persons has to register with the EPFO.
Recommended Read: EPF Rules Changed w.e.f 1st September, 2014
Here are the top Employee Provident Fund queries answered:
Q. Is Contribution to Employee Provident Fund Mandatory?
A. Yes, contributing to EPF is mandatory for the employees who have a basic salary plus dearness allowance is up to Rs.15,000 (earlier it was Rs.6,500). And those who are earning above Rs.15,000 may contribute voluntarily.
But the decision to opt out of scheme should be taken at the start of your career. In case, you have been a member of EPFO once, then you are not allowed to opt out of the scheme.
Opting out of the scheme will increase your in hand salary and thus your tax outgo will also increase, so it is strongly recommended to avail this scheme as this is the easiest way to build a corpus for retirement.
Q. What are the Tax-Benefits of EPF contribution?
A. One more benefit of this robust scheme is that the contribution made towards EPF is an eligible deduction under section 80C. The maximum deductible contribution is Rs.1.5 lakhs i.e. the limit of section 80C.
Q. What is the Break-up of EPF Contribution?
A. As per EPF Act, 1952, the monthly contribution of employee and employer would be divided in the following way:
So if your basic salary plus dearness allowance is Rs.15,000 than the contribution would go in this way:
|Employee Provident Fund||Rs.1,800||Rs.550.5|
|Employees’ Pension Scheme||0||Rs.1,249.5|
|Employee Deposit Linked Insurance||0||Rs.75|
Q. What is the current interest rate on EPF?
A. The current rate of interest is 8.75% p.a. The interest is compounded yearly.
The point to note in the interest calculation is done only on the part of EPF not on EPS. So if your contribution towards EPS is Rs.1,800 (12%) and your employer contribution towards EPF is Rs.550 (3.67%) and Rs. 1250 (8.67%) towards EPS, than the interest of 8.75% would be calculated on the amount of Rs.2,350.
Q. Which one is better – EPF Vs. PPF?
A. Generally Employee Provident Fund is for salaried person and Public Provident Fund is for self-employed person. But salaried person can enjoy benefit of both EPF as well as PPF while self-employed person can only take benefit of PPF.
Recommended Read: EPF vs. PPF
Q. How to Check my EPF Balance Online?
A. Members who are active means currently contributing towards the scheme can access their account on the portal of EPF India i.e. at
Q. How and when can I withdraw my EPF account money?
A. You can withdraw your EFP money for various reasons but only by fulfilling certain conditions, non-compliance of which would result in levying of penal interest.
Recommended Read: Reasons and Condition to withdraw EPF Money
Apart from the above stated conditions, if a person is taking a VRS at the age of 54 and above, then EPF money could be taken out only up to the 90% of the balance.
Q. What is Illegal Withdrawal of EPF Money?
A. As per EPF rules, withdrawing of EPF money at the time of switching jobs is illegal. You can withdraw only and only if you have not joined any other company within two months of quitting the job. You can transfer you EPF money once you get a new job.
Q. Can I contribute more than 12% towards EPF?
A. As per EPF Act, 1952, the minimum contribution of employee towards EPF account should be at least 12% but one can contribute up to 100% of your salary plus DA. This extra contribution from employee does is called VPF (Voluntarily Provident Fund) but remember this does not bound employer to contribute more. Employer can continue to contribute up to statutory limit of 12%.
However, many employers do not allow extra contribution of employee towards EPF. So you have to file an application with the Regional Provident Fund Commissioner. The format is given below:
Q. Is there any other benefit of EPF?
A. One more benefit of EPF account holder is that it gives a life insurance cover of Rs.60,000. This comes from the Employees’ Deposit Linked Insurance Scheme and for this employers have to contribute 0.5% of your monthly basic pay as premium for your life cover.
But companies that already provide life insurance benefits or group insurance policy to employees are exempted from contributing to this scheme.
Q. How to make any grievance of EPF?
A. The easiest way to file a grievance is to do it online.
Recommended Read: How to file EPF Grievance Online?
The other way to file grievance is to locate the regional office and drop the grievance by yourself.