Employee Provident Fund – EPF Contribution & PF Balance Check

By | June 23, 2019
Employee Provident Fund

Employee Provident Fund—regularly called PF—is a retirement advantage plot that is accessible to each and  every single salaried employees. It is a significant tool for retirement planning. The tax-free interest  (compounding) on Employee Fund and the development guarantees retirement money on Employee Provident Fund.

Both employees and the employer  contributes to PF at the ‘rate of 12%’ of the basic wages per month. However, the total contribution to PF is 24% per month. PF gives retirement advantage to us to verify a superior way of life at retirement. 
Be that as it may, there are numerous things about EPF which the majority of us are ignorant of. The below article gives you more data about EPF, like on what are the EPF loan costs and so on. 

Employee Provident Fund -EPF Contribution &PF Balance Check Along With  EPS 

Most associations today offer the office of PF. EPF and EPS are the two retirement plans under EPF Act, 1952, for salaried representatives. It is obligatory for each worker drawing a fundamental pay of up to Rs. 6,500 every month to make commitment towards EPF and EPS. Be that as it may, workers drawing fundamental compensation over Rs. 6,501per month have a choice to get PF deducted. 


Generally, both the business and representative contribute 12% each of the ‘fundamental compensation’ of the worker in addition to DA . The 12% of representative’s commitment , 8.33% the absolute 12% in EPS. It is 8.33% of Rs. 6,500 (for example Rs. 541 every month) and the equalization of manager’s commitment goes into Employee Provident Fund – EPF. 
Accordingly, the business contributes just up to Rs. 541 every month (8.33% of Rs. 6,500 in the worker’s benefits plan account.We should accept, your essential pay is Rs. 10,000 every month and your fundamental ascents 5% every year.

Loan fee on EPF is credited every year. Your commitment to EPF is 12% of essential pay, and the business’ commitment to EPF is 3.67%. The rate of enthusiasm for the money related year 2012-13 is 8.6% per annum. The bookkeeping time of PF is from March to February consistently. The administration credits the intrigue intensified on PF balance in April consistently. 

Knowledge on loan of EPF 

The EPF loan cost is chosen through the local government . The EPF loan cost notice is accessible on the official site of EPF India on a yearly premise. For FY12-13, the intrigue determined on EPF is 8.6%. The commitment is made to EPF toward the finish of the money related year. Toward the start of the each financial, there would be an opening equalization, the sum amassed till at that point.

For Employee Provident Fund- EPF, accumulating funds is paid as on 1 April consistently. Nonetheless, EPS being an annuity conspire, intrigue isn’t appropriate. No premium is earned on the sum collected in EPS. 

Selection For Eligibility

Employee Provident Fund (EPF) likewise has selection office. You can select your mom, father, mate or kids. Anyway you can’t choose your sibling or sister for EPF.

Any nomination made by such part for an individual not having a place with his family will be invalid. Assignment is fundamental. The motivation behind naming a chosen one is to deal with the nominator’s benefits after his passing. 

Tax Reductions 

The business commitment is assessable however qualified for conclusion under Section 80C of Income expense Act.


Employee Provident Fund (EPF) and Employee Pension Scheme EPS 

Representatives changing their employments should move their EPF corpus and don’t pull back it. EPF is right now offering 8.6% every year, which isn’t assessable. Thus, it is ideal to remain put resources into. Then again, whenever left immaculate, it is totally tax-exempt. 


For EPS, if the administration time frame is under 10 years, you have an alternative to either pull back your corpus if there is a break in administration.


For administration underneath 10 years, you generally get 100% of your EPF and EPS sum contributed. In the event of EPF, you get the collected sum in addition to the intrigue (which is 8.6% for FY12-13). The underneath table D demonstrates the “withdrawal advantage” which a representative will get on the off chance that he pulls back his EPS sum (from a half year to nine years). For example: A representative ways out from work following four years of administration his compensation on exit is Rs. 5,000. Once, a representative’s administration period crosses 10 years, the withdrawal alternative stops. 


EPF Withdrawals :

EPF withdrawal isn’t allowed on the off chance that you are as yet working. You can’t pull back it completely, however you can use it for employees’ education and their marriage. You can benefit the non-refundable development, simply subsequent to having finished least five years PF enrollment. Know more about EPF Withdrawls.

About Annuity 

A representative can begin accepting benefits under EPS simply in the wake of rendering a base administration of 10 years and accomplishing the age of 58 or 50 years. Be that as it may, no annuity is payable before the age of 50 years. Early annuity—that is a worker accepting in the wake of finishing 50 years old yet before 58 years—is liable to diminishing component @ 4% (from September 2008) for consistently missing the mark concerning 58 years. If there should arise an occurrence of death/disablement, the above confinement isn’t relevant. The annuity sum is payable to the qualified endorser till he endures. On the passing of the worker, individuals from his family—whom he has named—are entitled for the annuity. 


Under EPS, the monthly annuity is the premise of ‘pensionable compensation’. The recipe to figure benefits is: Month to month annuity = (Pensionable pay X Pensionable administration) ÷ 70 

Calculations :

Keep in mind your manager demonstrates your compensation as Rs. 6,500 for EPS, so the annuity is determined on a month to month compensation of Rs. 6,500. So in the event that you have worked for state 35 years, your month to month annuity will come to Rs. 3250 [(Rs. 6,500 X 35 years)] ÷ 70 as per the equation. Consequently, the most extreme benefits every month is liable to limit of Rs. 3,250 every month.


In any case, recollect, your boss’ commitment will be constrained on a regularly scheduled pay of Rs. 6,500 including essential + DA. It isn’t mandatory to business, to coordinate your willful commitment.

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