By - King Stubb & Kasiva on February 13, 2023
Employee Provident Fund in India also known as EPF or India Provident Fund, was established in 1952 and is a retirement benefit programme wherein both the employer and the employee make monthly contributions up until the employee retires. In addition to tax advantages, it offers comparatively greater interest rates than other saving plans. The employer is responsible for depositing the entire sum. The employee's portion was withheld by the employer from their pay. The interest from this investment is also credited to the employees' personal accounts. If certain requirements are met, the employees are given the accrued sum when they retire. EPF aims at promoting employee welfare.
This Act was passed as a social security measure that falls under the category of “retirement benefits”. To establish a long-term savings programme that would help people in retirement or superannuation, the government passed a piece of legislation. Employees were enabled to live a dignified life with ensured social security. The Employees' Provident Fund & Miscellaneous Provisions Act, 1952, is the law at issue.
The Employee Provident Fund in India was established with the goal to instil a non-withdrawable cash benefit that would be paid upon retirement or upon an employee's death. The central board, state board, and regional committee, all of which are chief executive committees that the central government appoints and establishes, are responsible for overseeing the administration of the plan established by this act.
The Employees Provident Fund & Miscellaneous Provisions Act of 1952, applies to-
1. “Every factory employing 20 or more people in any industry listed in Schedule 1 of the act”;
2. “Every other establishment employing 20 or more people, or class of establishments employing 20 or more people that the Central Government may notify”;
3. “Any other establishment so notified by the Central Government, even if employing fewer than 20 people.”
Every employee, including those hired through contractors, who receive salaries of up to Rs. 6,500 per month is eligible to join the funds (with the exception of apprentices engaged under the Apprentices Act or under the establishment's standing rules and casual labourers). the requirement for scheme membership of either three months of continuous service or 60 days of real employment.
The Act does not apply to-
EPF withdrawal in India might be withdrawn completely or in part. Complete Withdrawal is only possible in the following two situations, where all EPF can be withdrawn:
If an individual changes occupations before their unemployment time of two months or longer has expired, they are not permitted to completely withdraw their EPF balance. In some cases, partial removal is also possible. Generally, a physical application or an online application can be submitted to withdraw EPF. However, you can only use the online withdrawal claim feature if your UAN and Aadhaar are connected.
The EPFO member login page now allows EPF members for EPF withdrawal in India, twice from their EPF accounts to cover emergency costs brought on by the Coronavirus epidemic, according to a statement from the labour ministry. Members may take a non-refundable withdrawal of up to 75% of the funds in their EPF accounts, or, if that amount is less, three months' worth of their basic salaries and dearness allowance.
The Provident Fund in Indiaoffers an interest rate of 8.1% to subscribers for the years 2022–2023. Since 1977–1978, when the EPF interest rate was 8%, this rate hasn't been this low.Beginning in FY 21-22, interest on employee contributions to EPF accounts that exceed Rs 2.5 lakh throughout the fiscal year is subject to employee taxation. Section 194A of the TDS applies to this interest as well. Only EPF deposits made between April 2021 and March 2022 will be eligible for the interest rate, which is currently set at 8.10%.
You must go to the EPF members portal, also known as the EPF e-SEWA/EPF Members Portal, where you can choose to login with your UAN on the right side. UAN has to be activated previously. Each employee of the Employees' Provided Fund Organization (EPFO) is given a 12-digit number called a Universal Account Number (UAN), which he can use to manage his EPF accounts. Regardless of the company he works for, it is helpful for the person to have access to all Provided Fund (PF) information in one location. Through the UAN login interface, transfer of funds and EPF withdrawal in India takes place.
1. Employee Provident Fund (EPF), founded in 1952, is one programme that encourages retirement savings.
2. Employee Pension Scheme, 1995 (EPS): This programme intends to offer pension benefits after retirement.
3. The Employee Deposit Linked Insurance Scheme, 1976 (EDLI) provides life insurance to beneficiaries in the event of an untimely death.
Employees' Provident Funds and Miscellaneous Provisions Act of 1952 established two retirement savings plans specifically for salaried workers: Employees' Provident Fund Scheme (1952) and Employees' Pension Scheme (1995). Workers with a salary of Rs 6,501per month can choose to have their PF withheld from their pay.
The difference between the two are-
1. The Employees Provident Fund (EPF) is a programme that allows for the accumulation of retirement benefits. The Employees' Provident Funds and Miscellaneous Provisions Act of 1952's primary plan is this one. Under the direction of Employees' Provident Fund Organization, the programme is run (EPFO).
2. After turning 58, employees in the organised group get pensions under the Employee's Pension Scheme of 1995. 8.33% of the employer's 12% EPF contribution goes to the employee pension plan. Based on the pensionable earnings and pensionable service, the pension is determined.
Schemes under EPF Act include-
1. Employees provident fund scheme 1952
2. Employees deposit linked insurance scheme, 1976
3. Employee’s family pension scheme, 1995