Unless, you are working in the government sector, your retirement savings/pension is your responsibility. The rise in the number of people employed in the private sector has seen an increase in the adoption of the Employee Provident Fund (EPF), which is a reliable and popular choice for future retirement and pension savings. Read this guide to know about the wide range of benefits, withdrawal procedure and checking your pf balance.
EPF is a well-known abbreviation of the term ‘Employee Provident Fund’. The Employee Provident Fund is the Indian Government’s social security initiative. EPF is interchangeably used as PF. EPF is a savings scheme, which mostly falls under retirement benefit scheme, which can be availed by all salaried employees.
Each month, the equal contribution of employer and employee, which is 12% of basic salary each, is deposited into a provident fund account. Contribution to provident fund is compulsory for the employers drawing up to INR 15,000 per month. Employees earning more than INR `15,000 per month can opt for the membership of provident fund.
The break-up of employer’s contribution of 12% is as follows:
• 3.67% is contributed to provident fund
• 8.33% is deposited in pension scheme
It’s essential to note that if your basic salary (wage pay) is more than INR 15,000 per month, your employer contributes 8.33% of INR15,000 (i.e. INR 1,250) to your Employee Pension Scheme and the remaining amount of 3.67% gets credited into your EPF account.
PF is maintained and administered by the Employees Provident Fund Organisation of India (EPFO). According to the 1952 Act, any company with over 20 employees is required to register with the EPFO.
The PF number format is specific comprising of the following; Region/ Office/ Establishment Code/ Ext/ PF Number
Note: If 3-digit extension number is not available, you need to put it as ‘000’
Sample PF Account Number:
Example 1: MH/BAN/54321/2327999
Example 2: MH/BAN/54321/000/2327999
The fields that form the PF account number are identifiers for the region, the employer and the employee. Here, the PF account number symbolizes as follows:
|BAN||Bandra EPF office|
|54321||Five digit code is employer /establishment of your organisation|
|2327999||Seven digit number of your actual PF account|
|‘000’||Information regarding the region where the PF is held|
UAN is an abbreviated term of Universal Account Number. It is a 12-digit unique number given to every PF account holder. The EPFO allocates a UAN to everyone having a PF account. An account holder can access, verify, and withdraw from his/her Provident Fund account without any interference from his/her employer with his/her UAN number. UAN facilitates linking of multiple EPF accounts of a member. Aadhaar card enabled UAN will allow members to directly access EPF services.
If your UAN number is not on your salary slip, get it from your employer and check to see if it is activated on the portal. To generate your UAN you need to visit site and submit your KYC. After receiving your OTP on your registered mobile number, your UAN will get activated. Upon activation you can edit your KYC details and password.
[ Read: How to Register and Activate UAN Number ]
It is advisable to check your EPF balance regularly since it is your disciplinary retirementsavings scheme which has been jointly build up by you and your employer. There are multiple ways you can check your EPF balance. You can check your balance through missed call, SMS, mobile app, and other ways. Downloading e-passbook is also possible.
SMS facility is available in 10 languages including English and Hindi. Other languages are Telugu, Punjabi, Gujarati, Malayalam, Marathi, Tamil, Kannada, and Bengali. This SMS contains all basic details like PF number, Name, Date of Birth, EPF balance, and Last Contribution
To check your EPF balance, you need to fulfil the below mentioned requirements:
Note: Try intermittently if you face any difficulties on the site.
After registering online, you can access and download your EPF passbooks and slips multiple times from either your EPFO mobile app or UAN portal. Your EPF passbook is like your bank passbook.
You can download the passbook by following these steps:
OR you can directly click on: https://passbook.epfindia.gov.in/MemberPassBook/Login.jsp
Your passbook comprises of the following details:
To download your passbook, you need to remember your activated UAN number and password.
The Unified Mobile App For New Governance (UMANG), which can be download from Google Play Store, allows employees to access their account details to make withdrawal requests with the app. For making requests, your Aadhaar number and UAN need to be linked, however to view your passbook, Aadhaar is not necessary.
Aadhaar card is now considered as the most valid source of identification in the country. Linking of your Aadhaar card to your UAN enables you to easily make withdrawals, transfers and other procedures without the verification of employers.
When it comes to withdrawal from your PF account, your EPF account number is the most important thing for withdrawal application
[ Read: How to Link Aadhaar with PAN ]
You can avail of the following benefits by contributing to your EPF:
At the start of every year i.e. 1 April, your opening balance on EPF account is considered for calculating interest. The Employees Provident Fund Organisation (EPFO) has reduced the interest rate on provident fund deposits to 8.55% for 2017-18 from the former 8.65%.
Your opening balance for the next year would be:
Add: Total monthly contributions
Add: Interest on the (old opening balance + contributions)
It means Compound interest in EPF is paid on the credit amount outstanding in the employee’s name as on 1 April every year.
A scheme available for salaried individuals to opt for, above the 12% contribution. You can opt for VPF by requesting your employer to deduct an additional percentage from your salary towards your PF, which has a wide of range benefits, including tax saving, as well as adding greatly to your retirement portfolio.
A. If you have an inactive EPF account due to any reason., you can either transfer the balance to your new EPF account or withdraw the entire funds. If you choose to withdraw the funds from an account that is less than 5 years old, then the balance will get added to your income and your tax liability will increase.
A. The EPF scheme is one of the most popular long-term investments schemes in the country. Employees can easily save a portion of the monthly salary for their retirement or withdraw funds for life events, such as children’s education, marriage, purchase of property etc. The tax benefits u/s 80C are a plus point and the ease of saving one’s money, makes this important for anyone wishing to save money for their future.
A. If an EPF account has not seen any activity for 36 months, then it is labeled dormant. However, it continues to earn interest. A dormant account is treated the same as an inactive account. You can either transfer the funds to your new EPF account or withdraw it.