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Finance and Tax Consultant


As per EPF scheme, any establishment having more than 20 employees has to register with the EPFO.


Every employee is allotted UAN (Universal Account No.) by EPFO at the time of joining EPF. Contribution to EPF is mandatory if your salary is INR 15,000 or less. But once you become member of EPF, you cannot opt out of it even if your salary increases from INR 15,000. In that case, you will have to change your job to opt out of it.


Contribution


Contribution is made by employee and employer. Employee contribute 12% of his salary towards EPF whereas employer contribute 12% of his employee's salary towards EPF & EPS. In addition to this, 1.61% is contributed towards charges and insurance.

Contribution is as per following table:

 

Scheme Name

Employee Contribution

Employer Contribution

Employee Provident Fund (EPF)

12.00%

3.67%

Employees' Pension Fund (EPS)

0.00%

8.33%

Employees Deposit Linked Insurance (EDLI)

0.00%

0.50%

EPF Admin Charges

0.00%

1.10%

EDLI Admin Charges

0.00%

0.01%


In case of employee contribution, 12% goes to

EPF. But in case of employer contribution, 8.33% goes to EPS subject to maximum of INR 1,249.50/- and balance goes to EPF.


Nomination


One can avail the facility of nomination while joining the EPF. But in case, it has not been done at the time of joining, one can fill up Form 2 to update/ change the nomination details. In case of death of the person, nominee gets the Provident Fund amount.


Insurance


Contribution to Employees’ Deposit Linked Insurance (EDLI) provides insurance cover to the EPF members in case of death. Insured amount is INR 6,00,000.


Pension


It has already written in one of the previous post that a part of Employer Share actually goes to EPS (Employee Pension Scheme). One can get pension from his/ her provident fund. But there certain conditions which are:

  1. He/ She has completed the age of 58.
  2. He/ She has been member of EPF for minimum 10 years (in case of transfer from one employer to another, he has got his EPF account transferred).
  3. The maximum pension is subject to maximum of INR 3,250 per month.
  4. Lifelong pension is available to the member and upon his death members of the family are entitled for the pension.
  5. The minimum monthly pension received by the legal heirs of the deceased members was fixed as follows:
    1. Widow: Rs.1,000 per month
    2. Children: Rs.250 per month
    3. Orphans: Rs.750 per month



No Interest on EPS (Employee Pension Scheme)


I have already mentioned that a part of employer's share goes into EPS. People usually think that they get interest on entire PF amount contributed by Employee and Employer. But actually this is not true. Contribution to EPS out of Employer Share does not earn any interest.



VPF (Voluntary Provident Fund)


One can invest more than 12% of his/ her salary to PF account. This excess contribution to PF is called VPF. You can contribute to PF in percentage (%) terms only. It means you can ask your employer to deduct excess 3% of your salary but you cannot say deduct INR 2,000 more. You will get the interest on VPF. But Employer will not contribute matching % for VPF . Employer will only 12% of your basic salary, not beyond that.


Rules applicable to VPF is same as applicable to employee's contribution. There is no change. Only difference is that instead of you contributing 12% of your salary, now you are contributing more to PF.

Tax benefit is available u/s 80C on VPF contribution subject to the maximum limit available for this section.



Withdrawal of PF


As per the EPF Rules, you can withdraw your PF money only if

  1. You do not have job at the time of withdrawal of PF money and 2 months have passed since your last job OR
  2. You have completed 58 years of age.

It is not mandatory to withdraw PF in 1st case. It depends on you.

If you have joined new job, you will have to get your EPF account transferred to your new employer.


EPF withdrawal (other cases)


There are certain special cases or exigencies have been mentioned for which EPF can be withdrawn. Purpose of withdrawal is almost the same as in the case of PPF but conditions differ. For the following purposes EPF can be withdrawn subject to certain conditions:

  1. Medical treatment for Self or family (spouse, children, dependent parents).
  2. Repay a housing loan for a house in the name of self, spouse or owned jointly.
  3. Marriage or education of self, children or siblings.
  4. Alterations/repairs to an existing home for house in the name of self, spouse or jointly.
  5. Construction or purchase of house or flat/site or plot for self or spouse or joint ownership.


Opt of EPF


If a person's salary is less than INR 15,000, he has an option to opt out of PF. But he will have to opt out of it at the time of joining the job. Once the contribution to PF has started, you cannot opt out of it unless you leave that job. But it is always advisable to become member of EPF due to its benefits.


RTI for EPF


You can also file RTI in case of any information or issue regarding EPF.


Online Statements


One can get online EPF statements from the website www.epfindia.com



Know your PF Balance

EPFO provides the facility to know the balance in your EPF account. This facility was started on 1st Jul-11. To know your balance, just visit http://www.epfindia.com/MembBal.html.


Click on the link given at the bottom of the page. You will get the webpage like this.



Now, select your State and PF Office. Enter your PF no., Name and Mobile no. and click on I Argee. Click submit. You will get your PF balance on your mobile.


In case, you do not know your PF office, you can search for your establishment on the given link based on certain criteria.





Know your PF Claim status


Like PF balance, EPFO provides the facility to know the claim status for PF withdrawal. This facility was started on 18th Apr-11. To know claim status, just visit http://www.epfindia.com/ClaimStatus_New.html


Click on the link given at the bottom of the page. You will get the webpage like this.



Now, select your State and PF Office. Enter your PF number and click submit. You will get your claim status on the screen.


In case, you do not know your PF office, you can search for your establishment on the given link based on certain criteria.


Withdrawal from EPF

One can withdraw from EPF prematurely in some specific situations. Following are the situation in which you can withdraw from EPF subject to conditions mentioned against them:


  1. Medical treatment for Self or family (spouse, children, dependent parents). Conditions:
    • For major surgical operations or for TB, leprosy, paralysis, cancer,  mental or heart ailments.
    • The maximum amount that can be withdrawn is 6 times your salary.
    • You must show proof of hospitalization for one month or more with leave certificate for that period from your employer.
  2. Repay a housing loan for a house in the name of self, spouse or owned jointly. Conditions:
    • You should have completed at least 10 years of service.
    • You are eligible to withdraw an amount that is up to 36 times your wages.
  3. Marriage or education of self, children or siblings. Conditions:
    • You should have completed a minimum of seven years of service.
    • The maximum amount that can be withdrawn is 50% of your contribution.
    • You can avail it three times in your working life.
    • You will have to submit the wedding invite or a certified copy of the fee payable.
  4. Alterations/repairs to an existing home for house in the name of self, spouse or jointly. Conditions:
    • You need a minimum service of 5 years (10 years for repairs) after the house was built/bought.
    • You can draw up to 12 times the wages, only once.
  5. Construction or purchase of house or flat/site or plot for self or spouse or joint ownership. Conditions:
    • You should have completed at least five years of service.
    • The maximum amount you can avail of is 36 times your wages.
    • To buy a site or plot, the amount is 24 times your salary.
    • You can avail it just once during the entire service.

Taxability on EPF withdrawal


When PF is Taxable?


When PF is withdrawn after completion of continuous service of 5 years  - In this case, it is not taxable.


When PF is withdrawn before completion of continuous service of 5 years - In this case, PF is taxable except in the condition when it is withdrawn due to reason beyond one's control (ill health or discontinuance of employer's business).



Correction in EPF Details

For change of name of employee and Father/ spouse


1. Joint request need to be made by employer and employee along with supporting documents for name change.

2. Supporting documents can be:

a. PAN Card 
b. Voters Identity Card

c. Passport

d. Driving license

e. ESIC Identity Card

f. Aadhaar Card

g. Bank passbook copy/Post Office Passbook.

h. Ration card

i. Any school/education related certificate

j. Certificate issued by Registrar of Birth & Death.

k. Certificate based on the service records of the Central/State Government Organization.

l. Copy of electricity/water/telephone bill in the name of the claimant.

m. Letter from a recognized public authority or public servant verifying the identity and residence of the member to the satisfaction of the competent authority.


For Change in Date of Birth


1. In cases where a member, who has not been issued with a social security number, disputes the date of birth at the time of exit the instructions as per image given below:

Process of change in DOB in PF

2. In cases where a member, who has been issued with a social security number, disputes the date of birth the same cannot be entertained unless supported by a valid documentary proof such as:

a. Certificate issued by the Registrar of Births and Deaths.

b. Any school/education related certificate.

c. Certificate based on the service records of the Central/State Government organisation.

d. Passport.

e. In the absence of proof of age/DOB as above, Medical Certificate issued by competent Civil Surgeon after examining the member medically and supported with an affidavit on oath by the member duly authenticated by Competent Court.