Employees Provident Fund A Small Article

Regarding Employees Provident Fund

*Q.* What do I need to know about Employees' Provident Fund (EPF)?

*A.* In EPF, a salaried employee contributes 12% of her Basic + DA into her EPF a/c whereas employer matches this contribution by investing 8.33% of Basic + DA or Rs. 1250 on a monthly basis, whichever is lower, into Employees' Pension Scheme (EPS) a/c and the rest i.e. (12% of Basic + DA) minus EPS contribution, into her EPF a/c. On the EPS portion, no interest is given and it is used for pension.

EPF amount can be completely withdrawn when an employee retires or when she remains unemplyed for 2 months or more. But if it is withdrawn before 5 years of continuous service then the entire amount, i.e. employer's contribution to EPF + interest earned on it + employee's contribution to EPF (if claimed as deduction U/S 80C) + interest earned on that, become taxable.

Partial withdrawal from EPF is allowed for certain specific reasons like marriage, education, home buy etc. But there are criteria for amount allowed for withdrawal as well as minimum number of years of service required.

Every EPF subscriber is now allotted a unique UAN (Universal Account Number). By logging into UAN portal one can check a/c balance as well as apply for withdrawal etc.