Employee’s Provident Fund(EPF) is a popular scheme introduced by the Employees Provident Fund Organisation(EPFO) under the supervision of the Central Government of India. This scheme is directed towards the jobholders to facilitate their habit of saving some amount from their salary to build a significant fund for their retirement. The scheme is directed by three acts, namely, Employees’ Provident Fund Scheme Act, 1952, Deposit Linked Insurance Scheme Act, 1976, and the Employees’ Pension Scheme Act, 1995. The fund is built with the monetary contribution offered by the employees and their employer each month. Both of them contribute 12% each of the employee’s monthly salary and their contribution towards the fund. Thus, the fund built acquires a pre-fixed rate of interest that is set by the Employees Provident Fund Organisation(EPFO). Employees avail a lump sum amount on their retirement which includes the acquired interest. The fund is open for employees of both the public and private sectors. Any organisation that employs more than 20individuals is liable to offer benefits of EPF to its employees. When an individual becomes an active member of the scheme they are eligible to avail various benefits of the fund. The various benefits an EPF employee member can avail are listed below:


The deposited amount and the interest received on the deposits are completely tax-free. But if you withdraw any amount before completion of the maturity(5 years from the activation of the account) tax will be imposed.


An EPF fund acts as an emergency fund for the jobholders. Partial withdrawal is allowed in case of any emergency or any uncertain event. The scheme allows for such premature withdrawal in specific cases. It is also helpful in case of job loss or if you quit your job for some reasons. In such a case the employee can withdraw 75 per cent of the EPF fund after a month.


In case of the death of the employee the amount including the interest is given to the nominee of the employee. It will help the family members to get through the loss. If the employee suffers a disability and is not in a position to work anymore then at that time these funds will be helpful.


After the activation of an EPF account then the employee will receive a Universal Account Number(UAN). Then they will be able to access their account easily via the EPF member portal. They can transfer their account every time they want to shift to a new job.


If the employee needs money for any special occasions like wedding, education of their child or sibling, house construction, repairs, housing loan repayment, medical emergency or for self then they can withdraw upto 50 per cent of funds from their account. A member is allowed to access this benefit for three times. To access these benefits the member must have served for at least a time period of seven years. They should also have authenticated documents for the events. In case of housing loan repayment the employee can utilise upto 36 months wages from the EPF account if he had completed ten years of service.  


The employees’ pension scheme was introduced in 1995. After retirement the employee is entitled to get pension if he has completed ten years of service without any withdrawal. The maximum pension amount has been limited to Rs 3500 per month. Also, your family is entitled to pension if you don’t survive the required period, provided they meet some specified conditions.


As per the Employee Deposit Linked Insurance(EDLI) scheme, in any organisation where group insurance scheme is not available to the employees, the organisation has to contribute 0.5 per cent of monthly basic pay as premium for the life insurance cover. 

For the financial year 2019-20 the rate of interest offered by the EPF scheme is 8.55 percent. The interest earned is tax-free. Such interest is paid only on the operative EPF accounts of employees who are yet to retire. The interest offered on the EPF scheme is calculated each month by dividing the rate p.a. by 12. Individuals may opt for either partial or complete withdrawal of the EPF fund under specific circumstances. They can withdraw the fund completely on retirement or if their unemployment period extends for more than 2 months. In case of special occasions they are entitled for partial withdrawal. Employees can withdraw their funds by submitting a withdrawal application either offline or through the online EPF portal. EPF is a retirement oriented scheme whose main aim is to provide financial stability to individuals after retirement. They also act as  good emergency funds. Individuals should try to avoid premature withdrawals to enjoy various long term benefits such as the pension or insurance scheme. As the maturity period is not too long it can be easily handled and will provide you financial stability in the long run.  

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