Are you eligible for EPF? Find out here.
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Are you eligible for EPF? Find out here

  • Highlights

  • EPFs is mandatory for those earning < Rs.15,000

  • Employee and employer usually contribute equally

  • Usually contributions amount to 12% of emoluments

  • Employers contribute on your behalf

The Employees’ Provident Fund (EPF) is a scheme run by the Employees’Provident Fund Organisation (EPFO), which is aimed at providing social security and retirement benefits. Here’s a brief guide that will help you figure out whether you’re eligible, and how to apply.

EPF eligibility criteria

If you are a salaried employee earning less than Rs.15,000 per month,it is mandatory for you to register for an EPF account. Organisations with 20 or more employees are required by law to register for the EPF scheme, while those with fewer than 20 employees can also register voluntarily. If you are drawing a salary higher than Rs.15,000 per month, you are termed a non-eligible employee and it is not mandatory for you to become a member of the EPF, although you can still register with the consent of your employer and approval from the Assistant PF Commissioner.

EPF eligibility criteria

As an employer, you may be exempt from registering for the EPF scheme if you employ fewer than 20 people in your organisation, or if a majority of your employees voice their consent for exemption. In the latter case, you may still be subject to certain conditions and will be required to undergo a number of formalities. In the case where an employee or group of employees is getting Provident Fund benefits that are on par with or exceeding statutory provisions, an employer can apply for exemption through Form 1.

How to apply for an EPF

If you are applying for a new EPF account, you will need to do so through your employer. You will have to provide all previous employment details, if any, through Form 11, and all family particulars or nomination details in Form 2.

If you are an employer with an organisation that employs 20 people or more, it is mandatory for you to register under the EPF scheme. If your organisation employs less than 20 people, you can still opt to register under the scheme. Registration requires you to submit details of your company, as well as details of each of the company’s owners. You can register for the EPF scheme on the official website

Benefits of EPF

The EPF is a welfare scheme that ensures that all salaried citizens are setting a portion of their earnings aside in anticipation of their retirement. While many salaried people do have their own private savings accounts and investments, many may not have the means or the financial know-how to make the required provisions for their welfare. So, the EPF comes in handy.

All interest on the EPF is tax-free, as are EPF withdrawals. While you will not be able to make a complete withdrawal until you’re 58 years of age, you can withdraw upto 90% of your EPF balance if you’re nearing retirement and have been out of employment for 60 days straight. What’s more, in a bid to increase the take-home salary for women, the government has reduced the required monthly EPF contribution for women employees to 8%. The government has also offered to pay the EPF contribution on behalf of the employer at 12% for any new employees and women employees who have been hired before March 2019 for a period of 3 years.

Since EPF increases your savings and makes it compulsory for your employer to also contribute, find out about it and monitor it to meet your financial needs in the future.

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