The Employee Provident Fund (EPF) is a statutory retirement savings scheme in India administered by the Employees Provident Fund Organisation (EPFO). It is a mandatory scheme for employers to contribute to for their employees.

Key Features:

• Retirement Savings: EPF is a long-term savings scheme specifically designed for retirement. Employees and employers contribute a fixed percentage of the employee’s salary, which is typically 12% for both.
• Tax Advantage: Contributions to EPF are exempt from income tax. Withdrawals from EPF during retirement are also exempt from income tax.
• Interest on Contributions: EPF contributions earn interest at a fixed rate announced by the EPFO. The interest rate is currently 8.50% for the financial year 2023-24.
• Minimum Sum Required: Employees who have completed at least five years of service are eligible to withdraw their EPF savings in the form of a lumpsum or annuity. The minimum sum required for withdrawal is Rs. 1 lakh.
• Voluntary Contributions: Employees can make additional voluntary contributions to their EPF account.
• Loan Facility: EPF has a loan facility that allows employees to avail loans for various purposes, such as buying a house or meeting medical expenses.
• Pension Scheme: EPF also offers a pension scheme for employees who have contributed to the fund for at least 20 years.

Eligibility:

• All employees working in India under a company covered by EPF.
• Minimum service of five years.

Contribution Rate:

• Employer and employee contribute 12% of the employee’s salary.
• The employer’s contribution is made on the employee’s salary up to the limit of 15% of the salary.
• If the employer contributes more than 12%, the additional contribution is made to the employee’s account as voluntary contributions.

Benefits:

• Tax- exempted savings for retirement
• Interest on contributions
• Minimum sum required for withdrawal is relatively low
• Loan facility
• Pension scheme

Additional Notes:

• EPF is a popular savings scheme among Indian employees.
• The EPF contribution is a mandatory part of the salary package in most companies.
• Employees can access their EPF savings anytime, but withdrawals are subject to certain conditions.
• EPF is a valuable retirement savings scheme that helps.