You have gone through this term several times, as a matter of fact, every month, from your salary, this amount is known as the provident fund is deducted from your pay. In this article, the basics of the provident fund will be covered. So, what is provident fund? In short form, it is one sort of investment fund that is contributed by you along with your employees every month. A certain amount of money is deducted from your salary, and later it is paid after the retirement to you.
The Employees Provident Fund is a scheme that is given to the employees who receives salary every month. It doesn’t matter whether the employee is working in the government sector or the private sector. The EPF is governed by the Employees PFO or the Provident Fund Organisation. Besides, every organization with more than twenty employees is needed to register with the EPFO. Also, your EPF account details can be found on the EPFO official website and you are given a Universal Account Number to get relevant information about your account.
The contribution that is given to the Provident Fund for an account is made by providing 12% of the first salary and the dearness allowance you get. In EPF, both you and the organization you work for contributes 12% to the EPF account out of which 12 percent goes to the account directly, and the 12 percent which is given by your employer goes to your EPF account also it goes to the Employee’s Pension Scheme. In general, around 3.67% is directed to the EPF account, and 8.33% is directed towards the pension scheme.
All these help are then directed to a trust which makes an interest income that is made sure by the government. At present, the rate of EPF is 8.8%, increased 0.5% from 8.75% from the previous year. In addition to this, your contributions that are made monthly, the yearly calculated interest rate on the money on your credit is as on the 1st of April of that particular year. For the following year, the interest for the EPF will be decided on the previous stock balance in your EPF account, i.e., the final balance + the entire contributions + the prior interest.
You can take money from your EPF account if you’re unemployed at the time and wait for two months. There is an exception for the undermentioned two cases, in which case you don’t need to wait for that time,
- In any case, if you’re doing job in foreign territory,
- Your gender is female, and you’re leaving your service for marriage.
In normal conditions, withdrawals cannot be made from the employees EPF account, but the employee can retake some nominal amount for the EPF account in the undermentioned cases,
- For marriage, higher education and costly medical treatment for the family of the employee or the employee himself,
- For any emergency situation.