Dear All,
I want to share a few things related to EPF that some might know, but others might not be aware of. I hope this information will help you gain more clarity.
1: You can also nominate someone for your EPF - The nominee will be contacted only at the time of your death and handed over the PF money. If there is no nomination, there may be a lot of problems in claiming the money. One can change or add a nominee with form 2 (PFA).
2: You can get Pension in PF: EPF is divided into EPS and EPF, where EPF receives a 12% contribution from the employee + 3.67% contribution of the basic from employers. The remaining 8.33% (subject to a maximum of INR 541) share from the employer's side goes to the EPS. However, there are certain conditions for claims, such as:
a) can be claimed only after completing 58 years
b) must have completed at least 10 years of service and EPF is not withdrawn (can be transferred)
c) per month, the maximum pension cannot exceed Rs.3250
d) It's a lifelong pension and upon death, it is given to the nominee.
3: No interest is given on EPS (pension part): Compound interest is only paid on the PF part (12%-e/ee share + 3.67% e/er share). The 8.33% which goes to the Pension scheme does not get the interest but can be withdrawn along with the PF.
4: Getting 100% EPF might not be possible: The division is such that the employee gets 100% share that is deposited in the PF share (i.e., 12% + 3.67%), but for EPS, there is a separate criterion if you have not completed 10 years of service. For each completed year, one is bound to get the n times salary of the last wage drawn, subject to a maximum of Rs.6500 pm. Please see the EPS Table D as an attachment. The table would be for 9 years only since after completion of 10 years, you would be liable for the EPS. For example, if your last drawn salary is Rs.30,000 and you have completed 7.5 years of service, then the EPS given would be 6500 * 7.54 = Rs.49,010 only.
5: VPF: Employees can increase their share of PF, but employers are liable only for 12% only. You are bound to get compound interest on the increased share of PF as well. Once the PF share is increased by the E/ee, it cannot be revoked and hence has to continue paying the same amount till the time in the same organization.
6: Withdrawal During Service is Illegal: Not many are aware of this, and neither the PF department under normal conditions tracks this, but the withdrawal of your PF legally can only be done if you do not have a job and it has been more than 2 months. As per the EPF rules and records, it's illegal to withdraw the EPF if you are serving.
7: Can opt-out of EPF: Yes, it's possible! If the basic is more than Rs.6500, then one can opt-out of EPF only if the employee has never been a part of EPF before (so basically it applies to newbies only). The employee can tell the employer that they do not want the PF to be deducted and have to fill Form 11 and submit it duly to the employer. Such employees would receive all the salary in hand, but the employer is not bound to give you the share that has to be submitted by them to your EPF.
8: Your EPF gives you some life insurance too: A small life cover is provided through EPF as 0.5% of Rs.6500 from the employer's share goes to Employees Deposit Linked Insurance. Though a modest amount of Rs.60,000, yet everything counts.
9: PF can be drawn at special occasions while Serving: The occasions and the conditions are as follows:
a) Marriage or education of self, children, or siblings - must have completed a minimum of 7 years of service; the maximum amount you can draw is 50% of your contribution; can avail of it three times in your working life; will have to submit the wedding invite or a certified copy of the fee payable.
b) Medical treatment for Self or family (spouse, children, dependent parents) - For major surgical operations or for TB, leprosy, paralysis, cancer, mental or heart ailments; the maximum amount that can be drawn is 6 times your salary; must show proof of hospitalization for one month or more with a leave certificate for that period from your employer.
c) Repay a housing loan for a house in the name of self, spouse, or owned jointly: should have completed at least 10 years of service; eligible to withdraw an amount that is up to 36 times your wages.
d) Alterations/repairs to an existing home for a house in the name of self, spouse, or jointly: need a minimum service of 5 years (10 years for repairs) after the house was built/bought; can draw up to 12 times the wages but only once.
e) Construction or purchase of house or flat/site or plot for self or spouse or joint ownership: should have completed at least 5 years of service; the maximum amount you can avail of is 36 times your wages. To buy a site or plot, the amount is 24 times your salary; you can avail it just once during the entire service.
I welcome all if there is anything to be added or edited here, so that proper and accurate information could be provided to all.
From India, Chandigarh
Acknowledge(0)
Amend(0)
21I want to share a few things related to EPF that some might know, but others might not be aware of. I hope this information will help you gain more clarity.
1: You can also nominate someone for your EPF - The nominee will be contacted only at the time of your death and handed over the PF money. If there is no nomination, there may be a lot of problems in claiming the money. One can change or add a nominee with form 2 (PFA).
2: You can get Pension in PF: EPF is divided into EPS and EPF, where EPF receives a 12% contribution from the employee + 3.67% contribution of the basic from employers. The remaining 8.33% (subject to a maximum of INR 541) share from the employer's side goes to the EPS. However, there are certain conditions for claims, such as:
a) can be claimed only after completing 58 years
b) must have completed at least 10 years of service and EPF is not withdrawn (can be transferred)
c) per month, the maximum pension cannot exceed Rs.3250
d) It's a lifelong pension and upon death, it is given to the nominee.
3: No interest is given on EPS (pension part): Compound interest is only paid on the PF part (12%-e/ee share + 3.67% e/er share). The 8.33% which goes to the Pension scheme does not get the interest but can be withdrawn along with the PF.
4: Getting 100% EPF might not be possible: The division is such that the employee gets 100% share that is deposited in the PF share (i.e., 12% + 3.67%), but for EPS, there is a separate criterion if you have not completed 10 years of service. For each completed year, one is bound to get the n times salary of the last wage drawn, subject to a maximum of Rs.6500 pm. Please see the EPS Table D as an attachment. The table would be for 9 years only since after completion of 10 years, you would be liable for the EPS. For example, if your last drawn salary is Rs.30,000 and you have completed 7.5 years of service, then the EPS given would be 6500 * 7.54 = Rs.49,010 only.
5: VPF: Employees can increase their share of PF, but employers are liable only for 12% only. You are bound to get compound interest on the increased share of PF as well. Once the PF share is increased by the E/ee, it cannot be revoked and hence has to continue paying the same amount till the time in the same organization.
6: Withdrawal During Service is Illegal: Not many are aware of this, and neither the PF department under normal conditions tracks this, but the withdrawal of your PF legally can only be done if you do not have a job and it has been more than 2 months. As per the EPF rules and records, it's illegal to withdraw the EPF if you are serving.
7: Can opt-out of EPF: Yes, it's possible! If the basic is more than Rs.6500, then one can opt-out of EPF only if the employee has never been a part of EPF before (so basically it applies to newbies only). The employee can tell the employer that they do not want the PF to be deducted and have to fill Form 11 and submit it duly to the employer. Such employees would receive all the salary in hand, but the employer is not bound to give you the share that has to be submitted by them to your EPF.
8: Your EPF gives you some life insurance too: A small life cover is provided through EPF as 0.5% of Rs.6500 from the employer's share goes to Employees Deposit Linked Insurance. Though a modest amount of Rs.60,000, yet everything counts.
9: PF can be drawn at special occasions while Serving: The occasions and the conditions are as follows:
a) Marriage or education of self, children, or siblings - must have completed a minimum of 7 years of service; the maximum amount you can draw is 50% of your contribution; can avail of it three times in your working life; will have to submit the wedding invite or a certified copy of the fee payable.
b) Medical treatment for Self or family (spouse, children, dependent parents) - For major surgical operations or for TB, leprosy, paralysis, cancer, mental or heart ailments; the maximum amount that can be drawn is 6 times your salary; must show proof of hospitalization for one month or more with a leave certificate for that period from your employer.
c) Repay a housing loan for a house in the name of self, spouse, or owned jointly: should have completed at least 10 years of service; eligible to withdraw an amount that is up to 36 times your wages.
d) Alterations/repairs to an existing home for a house in the name of self, spouse, or jointly: need a minimum service of 5 years (10 years for repairs) after the house was built/bought; can draw up to 12 times the wages but only once.
e) Construction or purchase of house or flat/site or plot for self or spouse or joint ownership: should have completed at least 5 years of service; the maximum amount you can avail of is 36 times your wages. To buy a site or plot, the amount is 24 times your salary; you can avail it just once during the entire service.
I welcome all if there is anything to be added or edited here, so that proper and accurate information could be provided to all.
From India, Chandigarh
Acknowledge(0)Amend(0)Engage with peers to discuss and resolve work and business challenges collaboratively - share and document your knowledge. Our AI-powered platform, features real-time fact-checking, peer reviews, and an extensive historical knowledge base. - Join & Be Part Of Our Community.
EPF ON LINE REGN. USER MANUAL.pdf