What is Provident Fund (P.F)

 

1.  What is the Employee Provident Fund?

 

The Employee Provident Fund (EPF) is a plan that assists individuals with setting aside an adequate corpus for retirement. The arrangement was presented with the Employees' Provident Funds Act in 1952 and is today overseen by the Employees' Provident Fund Organization (EPFO).

 In this plan, a representative needs to contribute 12% of their fundamental pay towards the asset consistently. The business coordinates with this sum with an equivalent commitment. At the point when you resign, you get the aggregate sum (individual just as the business' commitment) as a singular amount alongside interest. The EPF is viewed as a generally safe venture as the Government of India oversees it and guarantees a fixed pace of return.

 Organizations with at least 20 representatives should keep up EPF represents their workers. A few organizations with less than 20 workers additionally receive the EPF plot. We will talk about this in detail later on.

 Likewise, the arrangement of an EPF account is necessary for workers with a compensation of under ₹15000. All things considered, most organizations give the office to all representatives paying little heed to their compensation. Also, on the off chance that you move starting with one occupation then onto the next, you can move your EPF corpus without any problem. This is conceivable through something known as the Universal Account Number.

 

2. Translating the EPF Monthly Contribution

 

As referenced above, both the worker and the business need to contribute similarly to the EPF account each month. Be that as it may, the genuine sum you add to your EPF account each month is determined on your fundamental compensation notwithstanding your dearness remittance and your holding stipend.

 For most workers, the commitment rate is 12%. Be that as it may, there are sure conditions where a 10% rate is material. For instance, if an organization meets the accompanying models:

 

 •             has under 20 representatives,

 •             suffers misfortunes that are more than its whole total assets,

 •             belongs to the jute, beedi, block, coir or guar gum industry,

 

Another unmistakable case is that of ladies workers. According to the 2018-19 Union Budget, new ladies representatives could contribute just 8% (rather than 12%) towards their EPF represent the initial three years of business. This was accomplished for two reasons:

 

 •             To urge organizations to recruit more ladies

 •             For ladies to get a higher salary.

 

Furthermore, however ladies workers can contribute 8%, the material pace of commitment for businesses keeps on being 12%.

 We have talked about all the diverse speculation arrangements accessible under EPF. Be that as it may, imagine a scenario in which you need to offer over 12% towards your EPF. All things considered, you can do it through something known as a Voluntary Provident Fund (VPF).

 

3. A Quick Brief on the Voluntary Provident Fund

 Like the term recommends, the Voluntary Provident Fund (VPF) is a deliberate asset commitment you make towards your opportune asset account. This commitment is past the 12% commitment you make towards your EPF. You can make a top level input up to 100% of your Basic Salary and Dearness Allowance and procure revenue at the very rate as that of the EPF. Notwithstanding, the business doesn't need to coordinate with this intentional commitment.

 We will speak more about the VPF later on. In any case, until further notice, how about we investigate other striking highlights that EPF has to bring to the table.

 

4. EPF Rate of Interest

 

As of now, the predominant rate on EPF stores is 8.65%, which is something similar for VPF. The EPF pace of interest is assessed each year. The accompanying table shows how the loan cost on EPF has changed in the course of recent years:

 

5 . EPF Tax Benefits

 EPF speculation goes under the class of Exempt, Exempt, Exempt (EEE) with respect to burden. It appreciates the EEE status as commitments are deductible from pay. No duty is material on the measure of cash you contribute, the premium you acquire or the sum you pull out toward the finish of its development. In any case, this tax reduction isn't accessible in the event that you pull out your venture before the culmination of 5 years. VPF falls under the EEE class as well and offers a similar tax breaks as that of EPF.

 

6. EPF Withdrawal

 Consistently, you redirect a little segment of your compensation into your EPF account. Over years, these commitments (alongside that of your boss) develop into an enormous corpus. Furthermore, as we have effectively examined, the point of this whole exercise is to guarantee that you have a considerable corpus to deal with your monetary necessities during retirement. At the point when you become 58 years of age, you can extricate 100% of your EPF corpus. Likewise, the EPF Act additionally permits you to pull out 90% of the corpus one year before retirement (given that you are at least 54 years of age).

 

There are likewise different special cases when you can make halfway withdrawals from your EPF account. These crises incorporate -

 

 •             Medical costs

 •             Marriage

 •             Housing credit reimbursement

 •             Purchase of a house/land

 

Keep in mind, you can make these fractional withdrawals solely after the finish of five years. Likewise, in the event that the EPF account holder dies, the candidate can guarantee the corpus of the endorser's EPF.

 

7. EPF Withdrawal in Case of Unemployment

 

On the off chance that you leave your work and you stay jobless for a month, you can pull out up to 75% of your EPF corpus to meet your costs. What's more, on the off chance that you can't discover work following two months, you can pull out the equilibrium sum. Additionally recall that you can utilize this element whenever. You don't need to sit tight for a specific number of years prior to making a withdrawal.

 

8. VPF Withdrawal

 

VPF permits incomplete withdrawals and complete withdrawals. This is a decent alternative to swear by in the event of any unanticipated monetary crises like taking care of emergency clinic bills for yourself or potentially your family. You can likewise tear your VPF account open for reasons, for example,

 

 •             construction or acquisition of new house or a private plot

 •             repayment of a current home credit

 •             higher training or marriage of kid

 

VPF is very famous among financial backers on the grounds that the amassed sum can be removed anytime. Yet, guarantee that your record is dynamic for a very long time in any event in the event that you need to try not to pay charge on the development sum.

 

9. Associating the Universal Account Number to the EPF Scheme

 

The Universal Account Number (UAN) is a 12-digit number, dispensed by the Employee Provident Fund Organization to each representative having an EPF account. The UAN stays steady for the duration of the existence of a worker and is versatile.

 

The essential advantage under the UAN is that you don't have to pull out your EPF when you change your work. You can move your EPF from an old business to another one rapidly and without issue. Consequently, paying little heed to the occasions you change your work, you can keep assembling your EPF corpus without a break.

 

10. Benefits of UAN to Employees

 

 •             You can move your EPF balance from an old record to another one through the UAN.

 •             Each new PF account with a new position will go under the aegis of a solitary bound together record.

 •             Whenever you need your PF proclamation, you can download one in a flash - either by signing in utilizing your part ID or UAN or by sending a SMS.

 •             New businesses don't have to approve your profile if the UAN has been Aadhaar and KYC-confirmed.

 •             It can be simpler to pull out (completely or in part) EPF online with UAN.

 •             It is simpler for you to guarantee that your manager is consistently keeping their commitment in the PF account.

 

11. How to Check the EPF Balance Online?

 

You can check the equilibrium of your EPF account, on the web, twoly.

 

•             Checking your EPF balance through the EPFO site:

 

You can utilize the EPFO site to see your PF passbook. You can likewise print the subtleties in the event that you need.

 

 •             Visit the site - www.epfindia.gov.in.

 •             Click to 'Our administrations' and decide 'For workers'.

 •             Go to 'Administrations' and select the 'Part passbook' choice.

 •             Type your UAN and secret phrase to see your passbook.

 

Albeit the EPFO furnishes you with the UAN, your manager should check and actuate it, for you to utilize these administrations.

 

•             Checking your EPF balance by means of the Umang application:

 

The Umang application dispatched by the Government of India is a useful guide to help you check your EPF balance. Through this application, you can see your passbook, raise a case, and track the case. You can enlist on the application by entering a one-time secret phrase shipped off your versatile

 

•             Checking EPF balance by sending a SMS:

 

You can see the message in English, Hindi, Punjabi, Gujarati, Marathi, Kannada, Telugu, Tamil, Malayalam and Bengali. On the off chance that you need to get the update in English, you send the message referenced previously. On the off chance that you need it in different dialects, utilize the initial three letters of your ideal language rather than 'ENG'. For instance, for accepting updates in Punjabi, you type - EPFHO UAN PUN.

 

The office is just accessible subsequent to incorporating your UAN with your KYC subtleties, for example Aadhar or PAN or ledger subtleties.

 

•             By giving a missed call:

 

Give a missed call to 011-22901406 from your enlisted portable number. You'll get a SMS containing your EPF balance. This help is additionally just accessible upon the mix of your UAN with your KYC subtleties, for example Aadhar or PAN or ledger subtleties.

 

12. End

 

As a representative, you can be guaranteed of a retirement corpus from the EPF plot. Also, all through your profession, on the off chance that you've moved positions, you can be guaranteed of profiting the advantages of the fortunate asset under a similar umbrella record, kindness the UAN. The VPF (on the off chance that you decide to contribute) gives extra insurance and cover.

 

In any case, on the other side, EPF has certain constraints. With regards to venture returns, other retirement saving alternatives like National Pension System (NPS) or Equity Linked Saving Scheme (ELSS) can possibly acquire more significant yields. Likewise, even VPF accompanies limitations. You can make a full withdrawal from your VPF account just at the hour of retirement. This can represent a test in the event that you need to meet other monetary objectives temporarily. A decent option is to put resources into NPS or ELSS on the off chance that you need swelling beating returns for