About Employees' Provident Funds
Most Beneficial and popular investment/savings scheme – Salaried Persons in India (REF 5)
EPF Organization includes 3 schemes: (REF 1 & 4)
- Employees’ Provident Funds Scheme 1952 – Accumulation + interest upon retirement, resignation, death. Partial withdrawals allowed.
- Employees’ Pension Scheme – Benefit retirement, permanent total disablement, superannuation pension or death.
- Employees’ Deposit linked Insurance Scheme – Providing life insurance benefits ∙ Came into
existence with the endorsement of the Employees’ Provident Funds Ordinance on the 15th November, 1951. (REF 4)
Now referred as the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952 (REF 4)
Act to provide for the institution of provident funds for employees in factories and other establishments (REF 1)
What is the Act?
- Compulsory Contributory Fund for employee’s future – (can receive after retirement or by nominee in case of death)
- Managed under Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, by Employees’ Provident Fund Organisation (EPFO).
- Act has amended 15 times till now (REF 5)
- EPFO in under administrative control of Ministry of Labour and Employment
- EPF Scheme – Employee and Employer has to pay equal amount
- Employer – 12% of basic salary (Pension Scheme – 8.33% & Provident Fund – 3.67%)
- Employee – 12% of basic salary (Provident Fund – 12%)
- Establishments > 20 employees – PF deduction rate would be 10%
- Later employee gets a lump sum amount (includes his & employer’s contribution)
- Any salaried employee who is a resident of India is liable for this scheme right from the first day of his/her joining to any job