Your company deducts a part of your salary each month as a contribution to the EPF account. Employees' Provident Fund (EPF) accumulated by the Employee Provident Fund Organization (EPFO) - a statutory body implemented by the Employees' Provident Fund and Miscellaneous Provisions Act, 1952. It is one of the most popular fund among the salaried individuals in order to cherish the retirement benefit in case of emergency fund requirement.
A salaried individual of a company listed under the EPF Act is eligible to invest in the EPF or PF. The employer and employee contribute 12 per cent of the salary of each employee (basic + dearness allowance) to the EPF. These contributions receive a fixed interest rate as established by the EPFO. The EPF scheme is one of the biggest and most comprehensive saving schemes accessible to the employees of India. Apart from the retirement savings, below listed are the five benefits which you must consider as a member of EPFO.
1. Under the Pension Scheme 1995 (EPS), this scheme proposes a lifetime pension plan.
2. This scheme also provides tax exemption according to Section 80C of the Income Tax Act.
3. If an EPFO member has contributed annually to the fund, and in the event of death, the family members are eligible for Insurance Scheme 1976 (EDLI). This scheme enables the member for an allowance up to Rs 6 lakh (20 times his / her last drawn monthly salary)
4. In the midst of the epidemic and unemployment the government has allowed partial withdrawal facility.
5. The money contributed in the EPF accounts provides good returns for members of an account. Currently the Employees' Provident Fund Organisation (EPFO) is providing an interest rate of 8.5 percent for the current fiscal year.