EPFO alert: Every account holder must know these 5 biggest benefits of PF account
Companies deduct the amount for the Employees Provident Fund (EPF) account every month from the salary of their employees. The company also has a second part in it. EPF is also known as PF. It is a government-established savings scheme for organized sector employees. Only employees of companies registered under the EPF Act can invest in EPF or PF.
Both the employer and the employee are required to contribute 12 percent of the basic salary and dearness allowance of the employee every month to the EPF account. Know five things related to EPFO every account holder should know.
Know the five biggest benefits of PF:
- EPF accounts provide excellent returns on deposits. Employees who have an account with the Employees Provident Fund Organization (EPFO) are provided this facility under the Employees Provident Fund Act, 1956. The rate of interest on EPF varies every year. It is now 8.5 percent.
- This savings scheme comes under the purview of tax exemption under Section 80C of the Income Tax Act.
- The government has provided partial evacuation facilities to help those affected by the Corona epidemic and unemployed during this period. This process is very easy and can be done online.
- It offers a lifetime pension scheme under the Pension Scheme 1995 (EPS).
- If a member of the EPFO is depositing contributions regularly, then in the event of his death, his family member can avail the Insurance Scheme 1976 (EDLI). Under this scheme, the member gets 20 times his last monthly salary. This amount can be up to a maximum of 6 lakh rupees.
Ms Kalinga
Withdrawing PF amount from EPFO has become almost impossible. Employers are becoming far more specialized in handing the PF and are not letting the employees withdraw the PF. They are resorting to tactics like not putting Date of Exit even though they themselves asked you to resign 3+ yrs back. They are creating small consultancies, hiring an employee let go by employer, capture his PF, UAN details, then let him go from the consultancies, while at the same time not doing the KYC to enable PF withdrawal.
While companies like Infosys may be fair in handling of the PF, there are many other employers whose PF handling is far more from being an ideal case. EPFO is a sleeping animal which is not wise enough to understand the tactics by employers.
It is better to handover EPFO handling to private sector companies such as HDFC, ICICI etc which are much better in handling these things