For nearly all people working in Government, Private or Public sector organizations, EPF is one of the main platforms of savings in India. Employees Provident Fund Organization (EPFO) of India implements this. Employees Provident Fund is done through MyTaxAdvisor.
Companies which have employee strength of 20 or more should be registered with PF Department. Contract employees like housekeeping, security or other contractual workers in the business, are included in that capacity of 20. Companies without the endorsed number of employees, willing to register themselves to provide the advantages of Provident Fund to their employees can register voluntarily with the Regional Provident Fund Office. Registration is to be done within one month from the date of hiring 20 employees. Any delay may result in a penalty.
Besides the contribution of the employee to EPF, the employer adds an equal amount which is inclusive of Employee Pension Scheme (EPS). Therefore, EPF saves you a robust pension.
In case of instances like illness, demise or retirement, Provident Fund helps the dependents of the employee by covering the financial risks they face in such situations.
While switching employments, the PF account can be transferred. It can be carried forward instead of being closed down. This uniformity ensures that the rate of return is compounded over the years.
Emergencies are bound to happen at any point of time in life. This EPF amount can prove to be of great help during mishaps, illnesses, weddings and educational expenses.
Any person who has PF account is eligible for this insurance scheme that requires only 0.5 % of the salary deduction as premium.
The PF account can be extremely helpful for long-term goals like buying a property or setting up a fund for children.
Both the employee and employer contribute 12% of the salary. The employers part consists of 12% of basic wages + dearness allowance + retaining allowance. If the number of employees is less than 20 in the firm, then the PF rate is 10%.
12% of the basic salary, that is deposited in provident fund account is contributed by the employers, whereas out of employee contribution of 12%; 3.67% is contributed to provident fund and 8.33% is submitted in Pension scheme.