Employees’ Provident Fund (EPF) is a retirement savings scheme that is mandatory for all salaried employees in India. It is administrated by the Employees’ Provident Fund Organization (EPFO) under the Ministry of Labour and Employment.
Employees’ Provident Fund (EPF) is a retirement savings scheme that is mandatory for all salaried employees in India. It is administrated by the Employees’ Provident Fund Organization (EPFO) under the Ministry of Labour and Employment.
The EPF scheme is designed to help employees save a portion of their income each month for their retirement. Employers are required to make contributions to the EPF on behalf of their employees, while employees also make contributions from their own salaries. The contributions are then invested and managed by the EPFO, with the aim of providing a source of income for employees during their retirement years.
Under the EPF scheme, both employees and employers are required to contribute 12% of the employee’s basic salary and Dearness Allowance (DA) each month. Out of 12%, employees contribute 8.33% and employer contributes 3.67% of employee’s basic salary and DA. These contributions are deposited into the employee’s EPF account, which earns interest at the rate determined by the EPFO.
Employees can withdraw their EPF balance for certain specified events like buying a house, marriage of children, children’s education, construction of house, serious illness of self or family members, and retirement. Withdrawals from the EPF before the age of 58 are subject to certain conditions and may be subject to taxes.
The EPFO also provides an option for EPF members to withdraw the entire accumulated balance in their EPF account after retirement, or to receive a monthly pension.
In addition to the EPF scheme, the EPFO also manages the Employee Pension Scheme (EPS), which provides a pension to employees after their retirement. The EPS is mandatory for all employees who have been contributing to the EPF for at least 10 years.
The EPFO also provides a number of other services to its members, including the settlement of claims, transfer of EPF accounts, and the provision of information and assistance on various labor laws and welfare measures.
In conclusion, the Employees’ Provident Fund (EPF) is a mandatory retirement savings scheme for salaried employees in India. It is administrated by the Employees’ Provident Fund Organization (EPFO) under the Ministry of Labour and Employment. Both employees and employers are required to contribute 12% of the employee’s basic salary and Dearness Allowance (DA) each month. The contributions are deposited into the employee’s EPF account and earns interest. EPF members have the option to withdraw the entire accumulated balance in their EPF account after retirement, or to receive a monthly pension. The EPFO also manages the Employee Pension Scheme (EPS) and provides a number of other services to its members.