All You Need to Know About EPF - Benefits and Objectives

EPF Compliance Staffing
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All You Need to Know About EPF - Benefits and Objectives

EPF is the main scheme under the Employees’ Provident Funds and Miscellaneous Act, of 1952. The employee and employer each contribute 12% of the employee’s basic salary and dearness allowance towards EPF. Currently, the rate of interest on EPF deposits is 8.10% p.a.

EPF Objectives​

  • To ensure every employee has only one EPF account.

  • Compliance must be facilitated easily.

  • Make sure organizations follow all the rules and regulations set up by the EPFO regularly.

  • To ensure that online services are reliable and to make improvements in their facilities.

  • For all member accounts to be accessed online easily.

  • Claim settlements are to be reduced from 20 days to 3 days.

  • Promotion and encouragement of voluntary compliance.

Key Benefits​

Employees’ Deposit Linked Insurance Scheme (EDLI)​

Under the EDLI scheme, a PF member may benefit from free insurance up to Rs 7 lakh in the event of death while on active duty. The EDLI scheme’s insurance benefits were boosted and liberalized in May. Maximum insurance benefits are now worth Rs. 7 lahks instead of Rs. 6 lahks.

Pension Scheme for EPF account holder​

A person who has an EPF account is also eligible for a lifelong pension plan under the Pension Scheme of 1995. (EPS). For the pensioners covered by the Employees’ Pension Scheme (EPS), 1995, a minimum pension of Rs. 1,000 has been mandated with effect as of September 1, 2014.

Income Tax exemption​

This savings scheme offers tax exemption under Section 80C of the Income Tax Act to an EPF Account holder.

Partial Fund Withdrawals​

In specific circumstances, such as a medical emergency, home loan repayment, the building or construction of a new home, home renovation, or a child’s or self-wedding, EPFO permits partial fund withdrawals.

Loan against PF​

In the event of a financial emergency, an EPF member may also be eligible for a loan with a 1% interest rate. The short-term must be paid up, though, within 36 months after the loan’s disbursement.

You can read more about all aspects of employee compliance from our resources section

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