The EPF or EPF account is a long term saving account in which employer and employee contribute a proportionate of their monthly salary. An organization known as Employee Provident Fund Organization (EPFO) is made to control all rules and regulations for EPF. An organization who hire 10 or more than 10 employees is required to register with EPFO. It is mandatory for the employees to contribute in EPF whose salary is 15000 or more than 15000, earlier it was 6500. EPF is a great long term savings which gives higher return in future which is good for Employee’s better future. An employee have to contribute 12 per cent of his salary towards EPF.
EPF work in a company:
- Some companies control and manages their own PF and get registered with the Income Tax office and labour ministry.
- Most of the companies like to manage their PF according to the guidelines of EPFO.
- In both the cases either company manages the PF or it follows the guidelines of EPFO, the return to an employee remains the same.
- Employee can withdraw his fully transferred PF once he get 55 year old.
- Employee can also withdraw his PF earlier if he has fired from the job for more than 6 months but in this case if employee has paid PF for less than 5 years then PF become taxable.
- For a temporary period of time employee can use the money which is kept in his PF account for some basic needs such as construction or purchase of house, health treatment, children education, injury treatment.
Final Words: The Employee Pension Scheme (EPS) is a great option for the employees to save their future as by this scheme employees get a monthly pension after retirement.The EPS allows to pay the pension to the widow after the death of her husband/employee.