Introduction: Employees Provident Fund
As an employee yourself, have you ever got curious about the reasons the concept of the Employees Provident Fund, commonly referred to as EPF, was launched in India? Like what are the benefits of it and how does it work? If yes, then this article is surely going to entertain you. Under the Employee’s Provident Fund scheme, the Ministry of Labor and Employment introduced EPF in the country for the very first time in 1952. And, since then the Employees' Provident Fund Organization has been bestowed with the responsibility to regulate it and promote the habit of savings among the working professionals in the country. Well, what was the motive behind it? We can say, to offer social security to the Indian workforce and help them build a secure future as a recognition of their hard work and commitment to their employers.
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Employees Provident Fund
For the Indian workforce, EPF is nothing but a savings tool that can be quite helpful during difficult times and the recent Covid-19 has proved this when hundreds of thousands of people applied for advances from their EPF accounts to fulfill the basic needs of their lives. Employee’s provident fund helps employees set aside a part of their incomes as savings and at the same time, makes it compulsory for their employers to contribute the same amount.
Let’s take a look at some interesting facts associated with EPF.
- Every Indian organization with twenty or more employees working for it must register under the Employees’ Fund Provident Organization.
- For an individual employee, there can be only one EPF account.
- Both the employee and the employer must contribute to the EPF scheme once a month in the equal segment of 12 percent of the employee’s basic salary and dearness allowance.
- Employees can make a withdrawal from their EPR accounts after the completion of one year of working, that too only in an emergency.
- Unlike others, the employers of NGOs are required to contribute to EPF just 10 percent of their employee’s dearness allowance and basic salary.
- Employees get an interest of 8.5 percent on the funds deposited in their EPF accounts.
- If an employee makes a withdrawal from his/her EPF account before completing five years of continuous service, then TDS (Tax Deducted at Source) will be deducted.
- Until employees reach the age of 58 years, they are not allowed a complete withdrawal of their EPR balance. But they can claim up to 90% of it if they’re not employed for 60 days straight or are near retiring.
Benefits of Employees Provident Fund (EPF)
EPF is a welfare scheme that works to make sure all salaried employees of India are making a monthly contribution to secure their retirement future. Many times salaried employees do not opt for any private savings accounts and instruments and the major reason for this can be the lack of awareness and knowledge to manage them. In such cases, EPF proves to be quite significant. To display its support, the Indian government has also offered to deposit the EPF contribution for 3 years on behalf of the country’s employers for any newly joined employees who have been hired prior to March 2019.
The EPFO is the regulatory authority for employees' provident fund, therefore, any regulations and norms it makes apply to every business present in the country.
Let’s talk about the benefits of EPF for employees.
- EPF helps employees save tax because the part of their salary they contribute to their EPF accounts comes under the non-taxable income and what’s further better is the interest on the EPF is also free from tax.
- To make the withdrawal easier for employees, the EPFO has reduced the time frame for claim settlement from earlier twenty days to just three days.
- EPFO has put redressal measures in place for violation of its regulations on the part of employers. Additionally, to give voice to the complaints of EPF account holders, it also has devised an efficient grievance management system.
- The women's contribution to EPF stands at 8% to raise their take-home salaries in a bid to ensure they can efficiently carry out their daily basic needs.
- It is very easy for employees to transfer their EPF corpus from one employer to another when they switch jobs.
The Process to Claim the Employees Provident Fund (EPF)
An employee intending to make a withdrawal from his/her EPF account is required to fill out an application form for the same and there are two ways in which that can be done:-
- Fill and submit a hard copy of the required application form
- Fill and submit the required application form online
Hard Copy of the Application form
Composite Claim form (Aadhar) and Composite Claim form (Non-Aadhar) are two types of forms that an employee can fill out based on certain criteria to withdraw EPF.
- Use the Composite Claim form (Aadhar) only if your Aadhar Card and the bank account are linked to the EPFO portal and the allotted UAN (Universal Account Number) is activated. Here, you need to fill and submit it to the office of the Employees Provident Fund Organization without needing the employer’s attestation.
- Use the Composite Claim form (Non-Aadhar) if the Aadhar card and bank account are not linked to the EPFO portal. Fill and submit it to the EPFO office with your previous employer’s attestation.
Online Application Form
The online withdrawal facility of EPFO has made the withdrawal process of EPF less time and effort-consuming. But before using it, make sure you fulfill the following requirements:-
- Your UAN number must be activated and the contact number that was used to activate it should not be out of service.
- The KYC documents, including your Aadhar Card, PAN card, and bank account are linked with your UAN number.
The Process to fill out the online application form for EPF withdrawal:-
- Go to the Member E-Sewa portal
- Fill in your UAN (Universal Account Number) and password credentials.
- Carefully enter the captcha and then hit the Sign In button.
- Go to the Manage tab and then click on the KYC option.
- Ensure all the KYC information including Aadhar, PAN, and bank details are verified.
- Thereafter, click on the Online Services tab.
- From the drop-down menu, select the Claim (Form-31, 19 10C, and 10D) option.
- Fill in your bank account number, and after that, click on the Verify button.
- Select the ‘Yes’ option to agree to the Certificate of Undertaking.
- Thereafter, select the ‘Proceed for Online Claim’ option.
- Under the ‘I Want to Apply for’ tab, select the EPF claim you’re seeking. Select whether you want to claim the entire EPF settlement or make a partial withdrawal.
- Hit the ‘PF Advance (Form 31)’ option and then fill in the purpose for withdrawing, the required amount, and the address.
- Click on the certificate and submit your application form.
After the completion of this process, you may be required to attach scanned documents for the purpose you have filled out the form. Alongside this, you also may need to get the withdrawal request approved by your employer, and only then you would get the EPF money in your bank account.
Note: 15-20 days are the usual time frame under which the EPF money gets credited to the bank account of an employee.
EPF proves to be pretty useful for the employees in the long run as the money deposited under it can help them spend their retirement lives without worrying about their basic needs. It gives them a sense of social security and comes in handy in times of emergencies. We hope you have liked this article and reading this has solved all your queries regarding the Employees Provident Fund. For more such content, feel free to explore the website of Corpseed ITES, which is India’s leading business consultancy service provider and has been offering assistance to startups and entrepreneurs for years.
This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not corpseed, and have not been evaluated by corpseed for accuracy, completeness, or changes in the law.
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