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Employees Provident Fund: How much can one contribute?

Employees Provident Fund: How much can one contribute?
Employees Provident Fund is a fund which is contributed by Employee and the Employer. It is also very vital tool retirement tool. The Fund shall vest in, and be administered by, the Central Board constituted under section 5A.

How much one can contribute? One can contribute generally @ 12% of one's emoluments.

However if one is employed in brick, beedi, jute, guar gum factories and coir industry other than spinning sector the rate of contribution is 10%. [Emoluments include basic wages, dearness allowance, cash value of food concession and retaining allowances, if any.]

Though this is the statutory limit, one can contribute more than this rate also. The percentages of 12% and 10% of the emoluments are subject to a ceiling of Rs 6500/-.

That is, if the emoluments per month is upto Rs 6500/-, the contribution will be 12 or 10% of that amount. If the emoluments are more than Rs 6500/-, then the contribution amount will be restricted 12 or 10% of Rs 6500/-.

The Employer also will contribute at an equal rate of 12% or 10% as the case may be. This contribution is also subject to the ceiling or Rs 6500/- as explained.

Read more about: epf tax investment
Story first published: Saturday, April 6, 2013, 10:56 [IST]
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