The Moneycontrol
EPF Guide

The Employees’ Provident Fund (EPF) has been one of the best investments to build a tidy retirement corpus. Investments earn us tax deduction benefits, interest and returns are tax free and it’s easy to invest. Over 6 crore people invest in EPF and its corpus is over Rs 10 trillion. Moneycontrol’s EPF guide gives you the nuts and bolts of EPF and offers a glimpse of what the future holds for an investment that every salaried employee loves.

Explained: How EPF’s taxable and non-taxable accounts will work

Employees contributing over Rs 2.5 lakh to their EPF account will feel the pinch of tax on interest on the excess amount this year, as the rules will be implemented when EPFO credits interest for FY 2021-22.

Link your provident fund UAN with Aadhaar: Here are the steps to follow

You link the two through the EPFO member portal. Activate your UAN if you haven’t already and log into the account.

Aadhaar not linked to EPF account? Your provident fund deposits will not get credited

Your access to EPF benefits will be suspended until the process is completed. Remittances to your account that will be affected

Calculate your EPF corpus at retirement

Your EPF corpus is your retirement nest egg. The higher this corpus, the better. It depends on your age, contributions, basic salary and the EPF interest rate that the EPFO declares every year.

EPF rule tweaked: Now, earn tax-free interest on contributions of up to Rs 5 lakh

Limit on tax-free employees' provident fund contributions raised from Rs 2.5 lakh announced in Union Budget 2021

Code of Wages: Lower take-home pay today, for a larger retirement corpus tomorrow

The government's new wage code requires basic pay to be 50 percent of your total salary. Provident fund deductions will, therefore, increase.

EPF interest in tax net: Where should high-income earners invest for retirement now?

Employees earning high salaries can opt for a mix of EPF, PPF and NPS to optimize returns

Watch
  • Video: Find out answers to all your questions on withdrawing from the EPF account

    If you are faced with a financial crunch due to the COVID-19 crisis, you can now dip into your employee provident fund (EPF) corpus. The Employees’ Provident Fund Organisation has opened up withdrawals from the account after receiving government approval. Read on to find out answers to all your questions on withdrawing from the EPF account

  • Video: Should one contribute towards Voluntary Provident Fund?

    Most of the salaried employees love EPF due to tax-free and secure returns, ease of investing and withdrawal benefits. But there is a way to increase the contribution towards EPF and voluntarily contribute more towards the retirement corpus. So, should one opt for VPF? Watch the video to find out.

  • Video: NPS vs EPF: Which one is better for investment?

    National Pension System and Employee Provident Fund, both the retirement options are overseen by the government but they differ from each other on various parameters. So, which one is better? And how much money can one withdraw upon reaching the retirement age? Watch the video to find out

Tax on EPF interest: How will TDS be applied?

The income tax department has indicated that interest income from provident fund contributions over Rs 2.5 lakh will be taxed like fixed deposit interest

Budget’s EPF tax googly: Should you rework your retirement strategy?

Interest earned on provident contributions of Rs 2.5 lakh in a year will now be taxed. Is it time to look for alternatives?

EPFO introduces electronic facility for principal employers to view compliances

EPFO informed all the concerned people about the electronic facility for principal employers.

Frequently Asked Questions
What is Employees’ Provident Fund (EPF) scheme?
EPF is a retirement scheme that is compulsory for those with basic salary of under Rs 15,000 and voluntary for others. But employers typically deduct up to 12 percent of your basic pay every month as your contribution to EPF and contribute an equal amount.
What are the benefits of being an EPF subscriber?
It promotes compulsory savings for your retirement. The rate of return is among the best in relation to other debt instruments and it’s tax-free.
How is the interest rate decided?
The EPFO board of trustees under the Ministry of Labour decides the rate of interest, which is approved by the Finance Ministry, every year. For the financial year 2019-20, the interest rate was 8.5 percent.
What tax benefits does the EPF scheme offer?
Your EPF contributions earn you a Section 80C tax deduction benefit, up to a limit of Rs 1.5 lakh. The interest you earn as well as maturity proceeds are tax-exempt.
Am I allowed to make withdrawals before retirement if the need arises?
Yes, if you need the money to purchase or construct a house, to repay a home loan, in case you or your family members suffer from any critical illness, to fund your marriage or that of your children or siblings or even for your children’s higher education, subject to certain conditions.
Can the funds be withdrawn in case of job loss?
Yes. If you remain unemployed for more than two months, you can withdraw your entire EPF balance.
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