In this article, I tell you the features and benefits of the Employee Provident Fund.
The long-form of EPF is the Employee's Provident Fund. This scheme is only for Salaried Employees. In this scheme, some percentage of the amount is deducted from salary per month. It creates large amounts for retirement and in emergency conditions.
In the EPF scheme, the fund is maintained by EPFO(Employee Provident Fund Organisation). According to the law, any company with 20 employees is able to register with the Employee Provident Fund Organisation.
The 12% amount from salary is deducted and credited into the EPFO account. 3.67% of the amount is credited to the Employee Provident Fund(EPF) and the remaining 8.33% of the amount is credited to the Employee Pension Scheme(EPS).
For Example, If the employee gets 10000 Rs. Salary per month, then 12% of the amount i.e. 1200 Rs. is deducted to EPFO. 367 Rs. (3.67% of 10,000 Rs.) is diverted to EPF and 833(8..33% of 10,000 Rs.) is diverted to EPS. The interest earned is between 8% to 12% which is decided by the Government of India and credited as of 1st April every year. You can get all information about the rate of interest on the EPFO official website.
Many Employees first worked in some company and then change their job with some other company, in this case, employees need to update their EPFO information with a new company, so that they use their contribution.
One thing that is important is interest earned is only on EPF amount and not on EPS amount as it is Pension Scheme.
The money contributed by an employee is tax-free and contribution is tax-deductible under section 80C of Income-tax, Government of India. Even money withdrawn after the specific period is exempt from Income tax.
If you don't want to pay for PF then it is only possible at the starting of your career. You need to tell your boss to you don't want to contribute to PF and Fill Form 11. If money is redirected to EPFO then it is not possible to opt-out from PF.
Withdrawal of amount is not allowed for EPF until you stop working. You can only withdraw your money when you have no job and the waiting period of 2 months is completed.
How to Withdraw EPF Amount?
1. Fill the declaration form with a valid reason for withdrawal.
2. You need to fill Form 19.
3. Sign Form 19 and make it attested by the former employer.
4. Submit the declaration letter along with the cancelled cheque to your company.
If you need to withdraw money immediately then only in some cases you can withdraw.
1. If an employee is planning to settle in another country. He/She needs to submit a copy of the VISA as proof.
2. If an employee gets a job in a foreign country. He/She needs to submit a copy of the Joining Letter.
3. If a Female employee is getting married and leaving her service. She needs to submit a Marriage Certificate or Wedding Invitation Letter.
The employee can withdraw a part of the money for the purpose of:
1. Marriage
2. Education
3. Medical Emergency
4. Housing Loan. Here you can withdraw money after 10 years of service or EPF contribution)
5. After 7 years of service, you can withdraw 50% EPF money.
If you are facing a problem with the EPF amount then you can contact EPFO customer cares.
What is UAN?
The UAN(Universal Account Number) is 12 digits unique number. It is given to each PF member. Transfer of one PF account to another PF account is easy with the introduction of UAN. Employees can withdraw money with the help of UAN. If aadhar number is linked to the UAN then it is possible to withdraw money without attestation from the employer. The employee can check their account balance details with the help of UAN.
How to check EPF balance?
1. Visit the official EPFO website and click on the Member portal.
2. Click on the know your balance button.
3. Select the location of the regional EPF office.
4. Enter your PF account number and your mobile number.
5. Click on the Submit button. You will get an SMS within seconds.
You can also check the balance through the UAN number:
1. Visit the UAN website.
2. Enter the UAN number and mobile number.
3. Select your EPF state and city.
4. Fill the captcha and click on the submit button.
5. You will get EPF balance through SMS.
The employee can also check their balance through SMS, Missed call, or through EPFO mobile app.
What to do if 2 UAN number with the same PF account:
Often people withdraw money while changing their jobs. Most of the time people open new accounts in the new company. But it is not a good process. You need to submit an old UAN number to the new company.
If you have already a UAN number and if you generate a new UAN in the new company then it stops your fund process. Even you are not able to transfer funds from the old PF account to the new PF account and your service history may have lapsed. You do not get the benefit of pension and your old PF amount is not add to the new PF account.
The Solution for this problem is to Merge both UAN numbers and deactivate the old UAN number.
How to Merge UAN numbers?
You need to give information to both your new company and EPFO about 2 UAN numbers. You can email EPFO at uanepf@epfindia.gov.in. EPFO then cross-verifies both UAN numbers. After verification, the old UAN number is blocked by EPFO. Now you can place the transfer request in EPFO.
How to Place Transfer request?
To place transfer requests, you need an active UAN number. Your aadhar number should be linked with UAN. Visit the official EPFO website and click on the ONE EMPLOYEE ONE EPF option. You need to submit your Mobile number, UAN, and MEMBER ID of the company. After submitting these details OTP will be generated. Fill the OTP and a new page will be opened where you need to fill in old EPF information. Your transfer request is generated. After verifying details EPFO deactivated your old UAN number and Fund transfer to the new UAN.
How to Create UAN Online?
1. Visit the UAN member portal.
2. Enter the aadhar number and OTP will be sent to the registered mobile number.
3. Fill the OTP and the system will automatically fetch the information.
4. Click to obtain your UAN. UAN has also received you through SMS.
Documents required to generate UAN:
Following documents are required to create UAN if you started a new job or your company is registered with EPFO:
1. Identity Proof: Driving License, Passport, Voter ID
2. Address Proof: Ration Card, Rental Agreement, Utility Bill in your name
3. Bank account details
4. PAN
5. Aadhar card
6. Employee State Insurance Corporation (ESIC)
How to activate your UAN?
1. Visit the Official EPFO website.
2. Click on the "Member UAN" section.
3. Click on the "Activate UAN" section.
4. Fill in the mobile number, UAN, PF member ID, and email ID.
5. Click on "Get Authorisation Pin". The PIN is sent to your registered mobile number.
6. Enter the Pin and Active UAN.
7. After activating UAN, the Password is sent to your registered mobile number. After login, you can change the password as you want.
How to Update Bank Details in UAN?
In case you fill the incorrect details by mistake in EPFO UAN then you can correct it within minutes. If you fill incorrect bank details in EPFO UAN then it may be the failure of your transactions.
You can update the details by following steps:
1. Visit the official EPFO website and go to the member portal.
2. Login with your User ID and Password.
3. After login click on the MANAGE tab.
4. Select the KYC option from the dropdown menu.
5. Select Bank Account Name, Number, and IFSC code and click on save.
6. Once approved by the employer, the updated KYC details are visible in the KYC section.
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