Find the complete guide about What is EPF and different phases of Eployee Provident Fund along with different services of EPF available to member…
Employee Provident Fund is a retirement savings scheme which has been launched by the Government of India. These schemes serve the employees of Government and Private organizations in every state who have a strength of more than 20 employees. Under the Employee Provident Funds and Miscellaneous Provision Act 1952, these provident fund schemes have been released for the benefit of employees.
The main aim was to protect the future of an employee after their retirement age, as their livelihood will have no income which was due to salary. This scheme is provided to every employee who has their employer registered with the EPFO scheme in India.
Employee Provident Fund Process
EPFO does have different stages which at the end make the employees retirement age secured with a good amount as part of savings.
Employee Share: Along with Employee Provident Fund, there are multiple schemes which are provident to secure the future of an employee. In this particular scheme the employee will be having an automatic deduction from their salary every month. There is a particular percentage of shares which one can define and as well a default share based on Basic salary will be deducted every month. The amount will be accumulated in the employee provident fund account.
Employer Share: These amounts will also be added with the Employer share which will be fixed and the basic default percentage of employee basic salary. The employer share will be constant based on basic salary but the employee does have the option to increase their share as per their convenience. The total amount which is accumulated in the Employee Provident Fund will be calculated with a fixed rate of interest defined for the financial year.
These amounts will be non-withdrawal with some exemption until the age of retirement. Employee Provident Fund is a tax free amount and can be utilized freely by an employee after their retirement.
Employee Provident Fund Benefits
Let us look ahead through some of the benefits which the Employee Provident Fund provides to an employee for their monthly savings throughout their working age.
- EPFO helps to build good Savings Corpus
- Post retirement lifestyle and retirement age is secured
- Minimum deduction from salary every month without huge loss
- Tax free amount during the time of superannuation
- Utilize a portion of amount during emergency in middle of employment
Let’s have a look a different services available in online or offline for EPF member for accessing their account
Employee Provident Fund Phases
Employee Provident Fund is all secured as fully guided by the Government of India and does make it the most trusted saving scheme for an employee.
Contribution: In the very first stage the Employee Provident Fund account created with the employee and employer share based on the basic salary of the employee received for the current month. The total amount of pay for the month must not exceed 100 percent of basic salary and thus has to be lower than that.
Interest on Account: The interest dedicated by the government of India every year during the financial budget session. Thus the same may applied to the total amount accumulated in the particular financial year in an Employee Provident Fund account. The amounts may calculated based on the formulae which equally defined the employees and employer share.
Universal Account Number: Every employee who is having an Employee Provident Fund will be provided with an UAN number. These numbers dedicated to one particular account and employees can access their details with these numbers only. The online service and offline option for an employee may easily accessed if they have access to their UAN number. The salary slip generated by the team player will have the UAN number printed at the top for reference.