The employee provident fund is made through the contributions provided by the Employee and the employer. Under the EPF scheme, both the employer and the Employee has to create specific contributions each month towards this EPF scheme. You as an employee will also get this money at the time of your retirement/ permanently due to any disability.
EPF is the tax-free investment instrument for salaried classes having the Exempt-Exempt-Exempt status. These contributions created by Employee is also eligible for the tax deductions; the interest also earned on the total investments & the withdrawal are also exempt from the purview of the taxation. To know the details, you also have to understand what is pf.
These specific contributions are made each month, encouraging the employees to save a portion of their salary every month. Investments made by the vast number of employees across India are also pooled together & invested by the trust.
The Employee’s provident fund organization also makes EPF of India, the statutory body of the Indian Government Under Labour & Employment Ministry.
This states that the organization has twenty or more permanent employees working in one hundred eighty plus industries and should mandatorily register with EPFO.
Where does the monthly EPF contribution go into?
Currently, the following three schemes are in operation under the EPF Act of 1952, & this is into these trusts which your monthly contributions go:
Ø Employees’ Provident Fund Scheme
Ø Deposit linked insurance scheme of Employee
Ø Employees’ Pension scheme
EDLIS, EPS & EPF are also calculated on the fundamental basis of your basics + Dearness allowness+ Retaining Allowance ( RA) if any.
What is EPS?
This scheme came into effect on 16th November 1995. This has also been designed as the benefit-defined social insurance scheme formulated following actuarial principles to ensure long-term financial viability.
This scheme aims at providing economic sustenance at the time of old age & survivorship coverage to member & their family. This EPS is funded by diverting 8.33 per cent of monthly wages from the employers’ share contribution. This central government also contributes 1.16 per cent of the monthly salaries.
What is EDLIS?
EDLIS stands for Employees’ Deposit Linked Insurance Scheme. This is the social security scheme to deliver a helping hand to the beneficiaries of a deceased employee. Maximum individuals are ignorant of the importance of owning the life insurance policy & also would prefer not to purchase one if given the selection to opt-out. Hence, to maintain the family’s specific economic wealth, the government has also introduced the EDLI scheme.
This scheme delivers life cover to every Employee of an organized sector. This group term insurance plan gets activated on an employee’s grief, paying the maximum sum ensured of nearly 6,00,000 to a nominee. An employer also bears the actual cost of a scheme. Pf vs ppf is the main thing you should know to learn the details about this.
Also, the members can activate their UAN account by sending the SMS to a particular number which you can get on the official site from the comfort of their mobile phones, which would enable them to avail themselves of the UAN related facilities. The basic format of SMS is:
EPFOHO < UAN >LAN
LAN stands for the first three characters of the preferred language in which the member desires to get the exact details.
This specific facility is also available in 10 various languages, namely Hindi, English, Punjabi, Marathi, Gujarati, Telugu, Tamil, Bengali & Malayalam.
Provident funds are also largely considered to be safe, an automated route of making the solid retirement corpus at the time of one’s job tenure, since you as the employee, compulsory contribute twelve per cent of your basic salary & dearness allowance each month, that is complemented by the equipment contribution by your employer, with the specific applicable interest rate standing at 8.5 per cent.
But, if you also work for the NGO, an employer contribution rate will also stand at ten per cent. As per law, every business that has more than twenty employees in their specific role are mandated to enroll under EPFO
EPFO currently launched the mobile app for the PF balance track riding on a mobile application trend in the Indian market. This mobile app also helps check the EPF balance & generate the account segment. The mobile app recently in the market is only available for Android. This EPFO will soon be launching mobile app versions for both iOS and android devices.