The Employee’s Provident Fund (EPF) is a scheme for retirement benefit of employees, which saves a part of their monthly salary as a fund for their future emergencies and retirement. Every salaried employee is eligible for holding an EPF account.
The topics discussed in this article are:
1. About EPF
2. Benefits of EPF
3. EPF Interest
4. Unwilling to pay EPF
5. What is UAN?
6. How to Check EPF Balance?
7. When to Withdraw EPF?
8. How to Withdraw EPF?
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- Without Employer Signature
- With Aadhaar
- Without Aadhaar
9. DSC For EPFO
10. EPF Customer Service
About EPF
Employee’s Provident Fund (EPF) is a scheme to benefit employees at the time of their retirement. All salaried employees can avail this scheme. The Employee Provident fund Organization (EPFO) oversees this scheme in India. The law requires every company with more than 20 employees to register itself with the EPFO. EPF acts as a savings platform which helps employees to save a portion of their monthly salary so that the resulting fund can be utilized in times of need when they are unemployed or retired.
Upon being employed, both the employer and employee contribute 12% of employee’s basic salary amount along with any dearness allowance to the employee’s EPF account. The whole 12% of employee’s salary is deposited to his/her EPF account whereas out of the employer’s 12%, 3.67% is deposited to the EPF account while the remaining 8.33% is diverted to the employee’s Employee Pension Scheme (EPS). For those employees whose basic monthly salary is more than Rs. 6,500, their employers can contribute only 8.33% of the basic pay, i.e. Rs. 541 of Rs. 6,500, to the EPS accounts of the employees, while the balance will be deposited to their EPF accounts.
Many employees pool these funds together which are invested by a trust. An interest of 8% to 12% is generated out of this, as the government and the central board of trustees decide. As of now, the annual interest rate is 8.75%, which can be checked through the official website of EPF India.
Every time an employee receives the pay, EPF applies to it. Therefore, it is important to provide EPF number and update EPF information with the new company while changing jobs so that there is no hindrance in the contribution.
Also,check unified member portal.
Benefits of EPF
EPF is one of the greatest saving schemes which are available to Indian employees. Its key benefits include:
- 100% Tax-Free Savings and Interests after completion of Maturity Period (after 5 years of availing the scheme)
- Financial Security for a long-term
- Monetary Security during Retirement Period
- Helpful in times of Emergency because it allows pre-mature withdrawal in special circumstances
- Useful in times of unemployment or loss of income to meet expenses
- Employee can freely withdraw 75% of the EPF after one month from resignation and the remaining balance after two months of being unemployed
- In case of death of employee, the EPF will be given to his/her nominee along with the interest
- The employee may use the EPF if s/he does not remain in the position to work due to a disability or other reasons
- EPF can be used in cases of sudden retrenchment or layoff from the job until s/he finds another job
- Safe and fool-proof for those willing to save long-term investments
- Provides liquidity of funds in times of financial crisis for covering unavoidable expenses
- Employer also contributes to the Pension Scheme of the employee which can be used after retirement
- Employer is required to contribute towards employee’s life insurance under certain provisions of the Act
- EPF number can be accessed and funds can be transferred easily by an employee through the EPF portal by using the Universal Account number (UAN)
EPF Interest
The government and central board of trustees decide the compound interest which is to be paid based on the amount of credit an employee has as on 1st April of that year.
Although the contribution to EPF is made monthly, the interest is calculated on a yearly basis. The amount accumulated at the start of every year is the employee’s opening balance. Therefore, the next year’s opening balance will be a sum of opening balance, total monthly contribution, and the interest on previous opening balance plus contribution. The interest will only be accumulated on the employee’s EPF balance and not on his/her EPS balance.
Unwilling to pay EPF
For those willing to opt out of EPF, it is only possible at the beginning of their career by informing the employer about it and filling Form 11. In case an employee has made contribution to his/her EPF even once and has his own EPF account, then it is not possible to opt out of this scheme. However, EPF will only prove to be beneficial in the long-run, even if it reduces current in-hand salary.
Also, Click at online epf withdrawal process.
What is UAN?
Universal Account Number (UAN) is a 12-digit number which is assigned to every member of PF. The introduction of UAN eliminated the hassle of shifting EPF accounts with jobs. With the UAN, an employee does not need to shift accounts while changing jobs because the UAN remains valid throughout the lifetime of an employee. Its benefits include:
- All of an employee’s PF accounts are unified as one account
- UAN can help transfer from one PF account to another
- UAN can be used to withdraw funds from PF accounts. Aadhaar linked UAN do not require employer’s attestation for making a withdrawal because Aadhaar serves as a valid verification of the employee
- Employees can use UAN to keep track of their accounts, keep check of contributions, track their account balance, and manage their EPF accounts individually without involving their employers.
How to Check EPF Balance?
To check EPF balance online through the EPFO member portal, the following steps can be followed:
Step 1 – Go to the EPFO Member Portal
Step 2 – On the bottom of the page, click ‘Know Your Balance’
Step 3 – Select your EPF regional office location
Step 4 – Enter your EPF account number and the linked phone number
Step 5 – On clicking ‘Submit’ you will receive a message on your phone number telling your EPF balance
To check EPF balance using UAN, follow these steps:
Step 1 – Go to the UAN website
Step 2 – Enter your UAN and registered mobile number
Step 3 – Select the state and city of your EPF
Step 4 – On clicking ‘Submit’ you will receive a message on your mobile number telling your EPF balance.
EPF balance can also be checked via SMS, missed call, or through the EPF mobile app.
When to Withdraw EPF
EPF cannot be withdrawn unless the employee is planning to quit working, is willing to be self-employed, etc. Withdrawals with EPF can only be made after 2 months of being unemployed by filling Form 19 and getting it attested by former employer and submitting it to the jurisdictional EPFO along with a canceled cheque and letter stating that the employee has been relieved of all services to the said company.
The 2 month mandatory waiting period does not apply to those employees, who are planning to settle abroad, who have got a job abroad, or female employees who are leaving the service so as to get married. Appropriate documents are required to be provided for the same.
How to Withdraw EPF
Without Employer Signature
With the introduction of UAN, EPFO has enabled employees to withdraw from their EPF accounts without employer’s attestation. All that employees need to do is link their Aadhaar to their UAN. However, there are two ways to do so: with Aadhaar and without Aadhaar.
With Aadhaar
- Aadhaar card and bank details of employee are embedded to the EPFO portal after employer has verified both.
- The employee will then have to ensure that his/her UAN has been activated and then download and fill the forms 19-UAN (EPF withdrawal) and 10C-UAN (EPS withdrawal).
- A canceled cheque should be attached to the form and submitted to the jurisdictional EPFO.
Without Aadhaar
- Employee needs to download and fill Form 19, 31, or 10C from the EPF portal
- An authorized signatory like a bank manager, gazette officer, magistrate, etc. is required to sign every page of this form
- The reason for not getting employer’s signature may be stated as ‘Non-Cooperation’
- An indemnity bond, Rs. 100 stamp paper, pay slips, employment ID, appointment letter, and Form 19 will have to be attached by the employer
- Address and Identity proofs including regular KYC documents, attested form, canceled cheque, and other verification papers must be submitted at the regional EPFO.
DSC For EPFO
Digital Signature Certificate (DSC) has been introduced by EPFO to make transfer processes more easy and transparent. Employers can use their DSC to approve claims of employees shifting from their organization.
Employers need to go to the EPFO portal and apply for the DSC with their personal details. The Certifying Authority issues the DSC which is inclusive of employer’s required details and is embedded to the EPFO portal.
EPF Customer Service
To avail EPFO customer care regarding the EPF account, the following steps may be followed:
Step 1 – Login to the EPFO portal
Step 2 – Click ‘Contact Us’ at the top of the page
Step 3 – You will find EPFO toll free number according to your employer’s region of location
To avail help for navigating through EPF processes, the toll free helpline available is 1800118005.
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