Top Employee Provident Fund Questions Answered

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Top Employee Provident Fund Questions Answered : Employee Provident Fund (EPF) is an account that every individual should hold who draws a salary of up to Rs. 15,000 per month.  If you are a salaried employee working for any organization, you must and should have an account in EPF to get benefited.  EPF is maintained by the Employees Provident Fund Organization of India (EPFO) and any organization that has more than 20 employees working for it needs to get registered with EPFO.  When it comes to Employee Provident Fund (EPF), people usually have many doubts, which were put into questions.  Today, we have come up with the answers for the most frequently asked questions on EPF.  So, if you are new to EPF or going to open an account soon then these questions will give your satisfying answers.  Read on!!!

Top Employee Provident Fund Questions Answered

Frequently asked questions about Employee Provident Fund (EPF)

  1. Is Contribution to Employee Provident Fund (EPF) mandatory?

Yes, of course.  Contributing to EPF is mandatory for the employees who receive a payoff Rs. 15,000.  For who earn more than the number can contribute voluntarily.  If you are a member of EPFO, then you cannot withdraw from the scheme.  It is at the start of the scheme that you will be allowed to opt out.  Alongside, opting out of the scheme will increase the amount of salary you receive, which implies that tax outgo will also increase.  So, it would be recommended that not to opt out of the scheme and to save up the money for your retirement by continuing with the scheme.

  1. What are the Tax benefits of EPF Contribution?

The tax benefit that is associated with EPF contribution is an eligible deduction under section 80C.  The maximum deductible contribution as per the section 80C is Rs.1.50 lakh for this current financial year 2015-16.

  1. What is the breakup of EPF Contribution?

If your basic salary plus dearness allowance is Rs. 15,000 then the contribution will be something like this.

Scheme Employee contribution Employer contribution
Employee Provident Fund Rs.1,800 Rs.550.5
Employees Pension Scheme 0 Rs.1,249.5
Employee Deposit Linked Insurance 0 Rs.75
  1. What is the current interest rate on EPF?

The current interest rate on EPF is 8.75% per annum.  The interest will be compounded on yearly basis.  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% will be calculated on the amount of Rs.2,350.

Top Employee Provident Fund Questions Answered

  1. Which one is better – EPF or PPF?

Employee Provident Fund (EPF) is only for the salaried person and Public Provident Fund (PPF) is for a self-employed person. While a salaried person can get the benefits of both EPF and PPF, a self-employed person can only get the benefit of PPF.

  1. How to check my EPF Balance online? ( Read Full Details)

There are two main ways to check EPF balance online.

  • You need to first register at https://unifiedportal-mem.epfindia.gov.in/memberinterface/ and request for passbook. The passbook will be issued in 48 hours after request and it will contain the balance and contribution details.
  • The second way to check EPF balance is through SMS. Go to the link http://www.epfindia.com/site_en/KYEPFB.php .  Select your PF office state regional PF office.  Enter your PF account number, your name, and mobile number to which you would like to receive the message and press on submit button.  You will immediately receive a message of EPG balance to your mobile.
  1. What is an illegal withdrawal of EPF Money?

As per the rules set by EPF, withdrawing EPF money at the time of switching jobs is illegal.  You can draw the money only if you did not join any other company within two months of leaving the previous job.  As soon as you get a new job you can transfer the money.

  1. Can I contribute more than 12% for EPF?

The minimum contribution of the employee towards EPF is 12%, but an individual can contribute 100% to EPF.  This extra contribution is called as Voluntarily Provident Fund (VPF).

  1. Is there any other benefit of EPF?

Yes, there is.  Contribution to EPF will give you a life insurance cover of Rs.60,000.  This insurance cover comes from the Employees Deposit Linked Insurance Scheme and for this employers have to contribute 0.50% of monthly basic pay as premium.

  1. How to make any grievance of EPF?

Employees who have switched jobs, but failed to transfer their EPF balance can apply for transfer using EPF grievance system. They can file a grievance through online by visiting http://epfigms.gov.in .

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