Employees’ Provident Fund or EPF is a government scheme that is a savings tool for the workforce. EPF scheme promotes savings for professionals employed in the service sector. Investing in an Employees’ Provident Funds scheme ensures you have a good lump sum of disposable income by the time you retire from your profession.
This scheme is managed under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, by the Employees’ Provident Fund Organisation (EPFO). This scheme extends to the whole of Indian except Jammu and Kashmir.
Under the EPF scheme, an employee has to pay a certain amount of money towards the scheme and an equal amount is contributed by the employer as well.
Many employees have a lot of confusion regarding their contribution, interest earned, and withdrawal options under the EPF scheme. Let us dig deep into some of the basics of the EPF scheme.
Basics about EPF Scheme
- For every employee, there is only one EPF account.
- In case of emergency, employees can withdraw a part of their EPF but only after a year of working.
- As per the law, any company or business that has equal to or more than 20 employees is bound to enroll under the Employees’ Fund Provident Organization.
- EPF allows both the employer and the employee to contribute 12% of each of the employees’ dearness allowance towards the provident fund and basic salary to the EPF every month.
- NGO employees contribute 10% of the employee’s dearness allowance and basic salary towards EPF.
What are the services offered by the EPF Scheme?
1. UAN
Universal Account Number (UAN) is a unique number allotted to all eligible employees. Member’s IDs allotted with different establishments are linked with his/her UAN. This helps the employee to view all the members in one place. When an employee joins a new organisation or company, he/she has to provide his/her UAN to the employer so that the new PF accounts are linked with his/her UAN. This UAN Number helps in withdrawing funds and transferring PF accounts easily.
2. EPF Contribution
As we have read above that both the employee and the employer contribution towards the provident fund, it is to be noted that the employee 12% of the combined total of basic pay, dearness allowance, and retaining allowance whereas 8.33% of the employer’s contribution is directed towards the Employees’ Pension Scheme.
3. EPF Interest Rate
For the current financial year 2021-22, EPFO has offered an 8.1% rate of interest on provident fund deposits. It is to be noted that the Ministry of Labour and Employment has slashed the interest rate for the current fiscal by 40 basis points.
4. Missed Call and SMS Service
UAN-activated members can easily get the details of their PF account simply by sending an SMS (Format: EPFOHO UAN to 7738299899) or by giving a missed call at 011-22901406.
5. EPF Member Passbook
EPF members can download their EPF Passbook on the EPFO member portal to check their account balance, and view their account statements, and withdrawals from the EPF account.
6. Partial Fund Withdrawals
This provident fund allows for Partial Fund Withdrawals. Partial Fund Withdrawal is permitted in certain cases such as medical emergency, home loan repayment, house purchase, renovation of a house, the wedding of children, or self.
7. Availing EPF services using the UMANG app
Through the UMANG app, employees can access EPFO services. The app allows both employee-centric as well as employer-centric services. Using this app, users can check their EPF balance, request withdrawals, can view EPFO office addresses, and apply for a life certificate. Several other services like EPFO offices, tracking claim status, account details via SMS, etc. can also be availed using the Umang app. In case of query, you can avail of the facility of the live chat option provided by the organisation through the app.
How to withdraw PF money from EPFO?
Users can withdraw their amount online. Here is a step-by-step guide to withdrawing PF money from EPFO:
Step 1: Visit EPFO’s website at https://www.epfindia.gov.in/ and enter your UAN number and password.
Step 3: Click on the ‘online services’ tab and choose Claim (Form-31, 19 & 10C).
Step 4: Enter the last 4 digits of your bank account number and confirm YES.
Step 5: Sign the certificate of the undertaking and then proceed for Online Claim.
Step 6: Select the claim you require under the tab ‘I Want To Apply For’ from the drop-down menu.
Step 7: Enter the amount you want to withdraw and upload the scanned copy of your cheque.
Step 9: Enter your address and click on Aadhaar OTP.
Step 10: Submit the 4-digit OTP number and click on Claim.
Step 11: After the employer approves the withdrawal request, you will receive the money in your bank account in 15-20 days.
Also Read: Income Tax Return Guide: All you need to know about ITR