Understanding the EPF Scheme: Benefits and Features

Ensure Seamless Compliance Today

Need expert guidance on EPFO, ESI, or compliance services? Get in touch for a free consultation!

The Employees’ Provident Fund (EPF) scheme is one of the most popular social security programs in India. Managed by the Employees’ Provident Fund Organization (EPFO), it provides financial security to employees after retirement or during emergencies. Both employers and employees contribute to the fund, creating a reliable savings corpus over time.

In this article, we’ll explore the key features, benefits, and eligibility criteria of the EPF scheme, helping you understand why it’s essential for every salaried individual.

1. What is the EPF Scheme?

The EPF scheme is a retirement savings plan designed to help employees accumulate funds for their future. Contributions are made monthly by both the employer and employee, with the total amount earning interest over time.

Contribution Structure

Employee Contribution: 12% of basic salary and dearness allowance (DA)
Employer Contribution: 12% of basic salary and DA (8.33% goes to the Employees’ Pension Scheme, and the remaining to EPF)

2. Key Features of the EPF Scheme

Retirement Savings: EPF helps employees build a substantial retirement corpus over the course of their career.
Tax Benefits: Contributions to EPF are eligible for tax deductions under Section 80C of the Income Tax Act. Additionally, the interest earned and withdrawals (subject to conditions) are tax-free.
Partial Withdrawals: Employees can withdraw a portion of their PF savings for specific reasons such as marriage, education, medical emergencies, and home purchase.
Interest Rate: EPF offers a competitive interest rate, which is declared annually by the EPFO. The interest is compounded annually, ensuring steady growth of the savings.

3. Eligibility for EPF

The EPF scheme is mandatory for employees working in establishments with 20 or more employees. It is applicable to:

Salaried employees earning up to ₹15,000 per month (mandatory)
Employees earning above ₹15,000 can opt for voluntary participation with employer consent

4. Benefits of EPF

Retirement Security: EPF provides a reliable financial cushion post-retirement, ensuring financial independence for employees.
Emergency Fund: In emergencies like medical treatment, home construction, or higher education, employees can make partial withdrawals without facing financial strain.
Pension Benefits: A part of the employer’s contribution goes to the Employees’ Pension Scheme (EPS), ensuring a regular pension post-retirement.
Insurance Coverage: Employees covered under EPF are also eligible for insurance benefits under the Employees’ Deposit Linked Insurance Scheme (EDLI).

5. How to Check EPF Balance

Employees can easily check their EPF balance online using the following methods:

EPFO Portal: Visit the EPFO portal, log in with your UAN, and check your passbook for balance details.
UMANG App: Download the UMANG app and access EPF services, including balance checks and claims.
SMS or Missed Call: Send an SMS or give a missed call from your registered mobile number to 9966044425 get balance updates.

6. How to Withdraw EPF Funds

EPF withdrawal can be done online through the EPFO portal. The process is straightforward:

Log in to the EPFO portal.
Go to ‘Online Services’ and click on ‘Claim’.
Fill out the withdrawal form and submit it.
Track the status of your claim online.

Conclusion

The EPF scheme is a vital financial tool for salaried employees, offering security, tax benefits, and long-term savings. By understanding its features and benefits, you can make the most of this valuable scheme.

Need help managing your EPF account or understanding the process better? Email us at contact@srsgconsulting.com or visit our Contact Us page. Our team of experts is ready to assist you!