Employees’ Provident Fund is a small saving scheme that is offered to Indian workers as well as international workers through the EPFO of India. The scheme allows accumulation of funds as well as accrual of interest on the accumulated funds. The funds thus collected are made of contributions partly from employees and partly from their employers.
A Universal Account Number system was started in October 2014 to allow portability of provident fund accounts of employees in case of change of employment. The 12-digit UAN is also helpful in keeping track of the provident fund account details and allows a centralized login to conduct many additional functions related to a provident fund account.
Rules pertaining to Employees Provident Fund
Contributions from employees as well as employers add to the EPF However, unlike what is commonly thought to be, the entire portion of contribution from an employer doesn’t go exclusively towards the Employees’ Provident Fund. The division of funds as of November 2015 is mentioned as follows –
- 12% of Salary of Employee goes directly towards Employees’ Provident Fund
- 12% of Salary of Employer is divided as follows –
- 3.67% of contribution towards Employees’ Provident Fund
- 1.1% of contribution towards EPF Administration Charges
- 0.5% of contribution towards Employees’ Deposit Linked Insurance
- 0.01% of contribution towards EDLI Administration Charges
- 8.33% of contribution towards Employees’ Pension Scheme
Employees’ Provident Fund Rules have undergone many changes over time and accordingly, inclusion and exclusion of employees as per those rules also change. As per the latest changes made to the EPF rules, the following should be borne in mind –
- Revision of minimum salary limits – Earlier, an employee having salary below INR 6500 per month had to mandatory contribute towards EPF. The minimum salary limit has been revised to INR 15000. Thus, employees with monthly salaries less than or equal to INR 15000 now have to contribute mandatory towards EPF
- Changes to pension amount – The minimum monthly pension amount has been now set at INR 1000 for the widow of a member of the Employees’ Provident Fund. For children and orphans, it has been set at INR 250 and INR 750 per month respectively. The pension amount henceforth will be calculated as per the average salary of the last 60 months, instead of 12 months
- Insurance Coverage – The initial coverage amount under EPS had been INR 156,000. As per the recent changes, this amount has now been increased to INR 300,000 per member
- Employer Contribution towards EPS – Due to the change in the minimum salary amounts, employer contribution has increased to INR 1250 per month towards EPS irrespective of if the salary is below or above INR 15000 per month
- Change in threshold limit – Instead of 20 employees per organization as the minimum group size, 10 employees in an organization will be considered eligible for EPF contribution
- Withdrawals – Withdrawals can be made from an EPF account through claim forms for financing an insurance policy, buying or building a house and a few other acceptable situations as per the EPFO
10 things to know about Employee Provident Fund withdrawal
Employee Provident Fund (EPF) should ideally be withdrawn only at the time of retirement of an EPFO subscriber. The Employees’ Provident Fund Organisation encourages the subscribers to transfer their money from their old account to a new EPF account instead of withdrawing it. 'One Member - One EPF Account' facility is one among the many initiatives that the EPFO had taken to encourage subscribers to transfer their money instead of withdrawing it. Subscribers can make partial withdrawals from EPF deposits for the purpose of loan repayment, wedding expense, medical expense, or house construction.
Here are 10 important things one should know about EPF withdrawal:
- As per the latest rules set by the EPFO, a subscriber can apply for EPF withdrawal only if he or she has been unemployed for at least 2 months.
- The amount that an EPFO subscriber receives upon withdrawal is eligible for tax exemption if he or she had contributed to the EPF for more than 5 years.
- If a subscriber transfers the EPF balance from the account maintained with the old employer to the new one, then it will be considered to be a continuous employment.
- When an employee loses the job due to a reason that is out of his or her control, like critical illness or layoffs due to an organisational shutdown, the withdrawal will not be taxed.
- If the EPF is withdrawn before the completion of 5 years, then the withdrawn sum is taxable during the same year.
- In the next assessment year, the EPF amount has to appear in the tax return. The contribution to PF by the employer and the interest earned on that sum is also taxable.
- The interest earned on the employee's contribution and any benefits claimed under Section 80C of the Income Tax Act, 1961 will be taxed as 'income from other sources' and 'salary', respectively.
- According to a recent rule set by the Income Tax Tribunal, the interest earned on EPF will be taxable if an employee quits the job.
- If there is a delay in EPF withdrawal after leaving an organisation, then the interest earned subsequently will be taxed.
- To make partial withdrawals or take advance from the EPF account, the subscriber has to meet certain eligibility criteria. The partial withdrawals/advances can be made online through the EPFO member portal.
How to check EPF Balance Online
The Employee Provident Fund (EPF) is a fund maintained by the Employee Provident Fund Organization (EPFO), based on contributions made by the employee plus the amount added by the employer towards the same. EPF is deducted from the employee's salary each month and the percentage of interest is accrued on a yearly basis. On the whole, EPF is a long-term savings option that comes with tax benefits and simultaneously ensures a stress free lifestyle post retirement. Provident fund also caters to the financial needs of the members for major life events such as marriages, medical treatments, education loan repayment, property purchase, etc. As per the norms, all establishments employing more than 20 members should compulsorily register for the EPF scheme.
With digitalization taking over most of the manual processes, EPFO too has launched a web portal for easy access of information by employees and employers. The online platform was initially launched in 2011, but was revamped several times to enhance usability. The retirement fund body has further expanded its digital footprint by launching social media pages, the purpose of which is to handle grievances and collate suggestions. To smoothen online transactions further, EPFO has made it mandatory to seed all PF accounts with Aadhaar. This will keep a track of balance and other important information pertaining to employment. With these enhancements in place, knowing the EPF status takes only a couple of minutes. Above all, an up-to-date information of your savings amount will definitely help you with your financial decisions.
How to check EPF Balance & claim status online?
You can check your provident fund balance and EPF claim status online with just a few simple steps. It is as follows:
- Login to the EPFO website and click on the link for balance check which is provided at the bottom of the page.
- You will be redirected to the Member Balance Information page where you can select your state and establishment code from the drop down menu.
- Selecting the codes will further lead to a page where you will have to fill out the following parameters: PF account number, name (as in EPF slip), and mobile number.
- If your PF account number doesn’t have an extension code, you can leave the box blank.
- Once you have ensured that all the parameters have been filled in correctly, check the terms and conditions checkbox and press submit.
- Within a few minutes, you will receive an SMS on your registered mobile number showing the PF balance.
- In case of name mismatch or any incorrect information, the system will display an error message listing out the types of errors encountered while processing the request.
EPFO Umang Mobile App for checking PF Balance
EPFO launched its mobile app for members in 2015 as an extra tool for providing convenient access to account related information. Using the EPFO app, members can download passbooks, transfer claims, view account status, and check current and previous employer details. Other mobile based services offered by EPFO include SMS based UAN Registration and balance enquiry with missed call.
The EPFO app allows pensioners to view their pension disbursement details and it also provides employers the remittance slip. Currently, the application service is available only for Android. Members can download the mobile app from Google Play or from the app downloads section of EPFO website. Given below are the steps to use EPF app for accessing your account related information:
- On the welcome screen select the “Member” link
- Further under the options listed, choose “balance/passbook” and enter your twelve digit UAN number
- Also, key in your registered mobile number
- On pressing submit you will be directed to a page that provides you the options to download forms, view account details, previous employer details, etc.
E-Sewa Web Portal for UAN Services
UAN based member portal is launched by EPFO to provide a wide range of services—right from viewing balance to tracking details of past and current PF accounts. The UAN acts as an umbrella account for multiple PF numbers issued by different organizations. It is issued only once and remains same throughout the employee’s career. UAN is also allotted to employees working on contract basis. By linking different PF ids of the member, UAN facilitates the easy transfer of funds from one account to another. To know whether UAN has been allotted to your PF account or not, access the E-Sewa website of the EPFO and click on the following link: http://uanmembers.epfoservices.in/check_uan_status.php. To activate your UAN, follow the steps given below:
- Enter your UAN and mobile number in the activation page
- Fill the details of your member id in the appropriate field
- Click on the “Get PIN” link
- The PIN will be sent to your mobile number as an SMS.
- Submit the same in the UAN activation page and press enter
- After activation, you will be able to login with your UAN number and password
How to download EPF passbook without UAN?
Even without a UAN number activated, you can get your passbook from the EPFO website by registering with a document number. Follow the below steps to download your passbook from the member portal without using UAN credentials:
- Open the EPFO official webpage on your browser
- Click on the option to register using document number
- From the drop down list, you can choose the type of document you wish to to link—Aadhaar number, PAN, voter id, bank account number, or driving license number
- Enter your date of birth in the respective column along with mobile number and email id
- Fill in the captcha code and click on the “Get PIN” link
- You will receive the PIN on your mobile number as an SMS
- Enter the PIN number and complete your registration
Once registered, you can login to the web portal with document number and mobile number and download the EPF account passbook.
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