Employees’ Provident Fund (EPF) | A Complete Guide

What is EPF?

The Employees’ Provident Fund or EPF, is a popular savings scheme established by the EPFO and overseen by the Government of India. Employees and employers both contribute 12% of their basic salary and dearness allowance to EPF. The interest rate on EPF ranges around 8%. The current annual interest rate on EPF deposits is 8.15%. EPF stands for Employees’ Provident Fund. The interest earned on the EPF is tax-free and can be withdrawn without penalty. Employees receive a lump-sum payment upon retirement, which includes accrued interest. Individuals can apply for EPF and avail of many online services by visiting the official website. The EPF web portal is an easy-to-use interface that ensures that services are delivered in a transparent, efficient, and trouble-free manner.

Benefits of EPF

Some of the benefits of EPF are as follows:

1. Savings: The EPF is a long-term retirement savings plan. Employees and employers both contribute a part of employee salary to the EPF account, helping people in creating substantial retirement savings.

2. Tax Benefits: Section 80C of the Income Tax Act allows EPF payments to qualify for tax deductions. Employees can use this to deduct their EPF contributions from their taxable income.

3. Interest on Accumulated Amount: The interest rate earned on the EPF balance is competitive and often higher than that of traditional savings accounts. The EPF balance increases over time because of the annual declaration and compounding of the interest rate.

4. Financial Protection: The Employee Provident Fund (EPF) gives employees a feeling of financial security by ensuring that they have a substantial savings fund to rely on in retirement. After retirement, this can support maintaining a comfortable quality of life.

Why is it important to Register for EPF?

Employers must register online since TDS is deducted from employees’ salaries. You must first open an account before you can register online. Companies with more than 20 employees must register for PF. EPF registration is important for employers because TDS is deducted from the earnings of employees. They would also be required to handle remittance only after employers issue challans via the EPFO employer portal. As a result, they must follow this process.

1. Risk Coverage: The most fundamental benefit of the Provident Fund is that it covers the risks that employees and their families may incur as a result of retirement, illness, or death.

2. Single Account: One of the most important characteristics of the Provident Fund account is that it is consistent and transportable. It is transferable to any other workplace.

3. Employee Deposit Linked Insurance Scheme (EDLIS): All PF account holders are eligible for this scheme. It states that the life insurance premium is deducted at a rate of 0.5% of the pay.

4. Long-term Goals: Many long-term objectives, such as a wedding or further education, require current financial availability. The accrued PF amount is typically handy on such occasions.

5. Contingent Events: Unforeseen occasions, such as a wedding or other family gathering, as well as any catastrophe or illness, demand prompt financial support. The PF amount can be very helpful.

6. Pension Coverage: In addition to the employee’s 12% contribution to EPF, the employer makes an equal contribution, including 8.33% to the Employee Pension Scheme (EPS).

How to check EPF Balance Online?

A member can check his or her EPF balance online by following the steps listed below:

Step 1: Go to the EPF website at www.epfindia.gov.in.

Step 2: Click on the ‘For Employees’ section of the “Services” menu.

Step 3: Select ‘Member Passbook’ from the drop-down menu.

Step 4: Now input your ‘UAN,’ password, and captcha code to access your EPF account (for EPF passbook login).

Step 5: Click on the ‘Member ID’ button to view your EPF member passbook.

Step 6: Your UAN passbook will be presented, complete with details. You can also download an EPF passbook by selecting the “Download Passbook” option.

The member may also check his EPF account by simply sending an SMS with the format EPFOHO UAN> ENG to ‘7738299899’.

A missed call to the EPF amount check number- 011-22901406 can also be used to find out the balance of an EPF passbook.

How can EPF be Withdrawn?

EPF can be withdrawn in part or entirely. When a person retires or is out of work for more than two months, he or she is entitled to a full withdrawal. Partial EPF withdrawal is permitted under certain conditions. Fill out the EPF withdrawal online form to file a withdrawal claim. You can make use of the online withdrawal claim feature if your Aadhaar is linked to your UAN.

Complete the EPF withdrawal application and file an online claim by following the processes outlined below:

Step 1: Enter your UAN and Password into the UAN Member Portal.

Step 2: From the top menu bar, pick ‘Online Services’ and then ‘Claim (Form-31, 19 & 10C)’ from the drop-down menu.

Step 3: The screen will display Member Details. Enter the last four digits of your bank account and press the ‘Verify’ button.

Step 4: Select ‘Yes’ to sign the certificate of undertaking and continue.

Step 5: Select the ‘Proceed for Online Claim’ option.

Step 6: Choose ‘PF Advance (Form 31)’ to withdraw funds electronically.

Step 7: A new section of the form will appear, in which you must pick the ‘Purpose for which advance is necessary,’ the amount required, and the employee’s address.

It should be noted that any options for which the employee is ineligible for withdrawal will be highlighted in red.

Step 8: Check the certification box and submit your application.

Step 9: Depending upon the purpose for which you filled out the form, you may be required to send scanned documents.

Step 10: Your employer must accept your withdrawal request before the funds are removed from your EPF account and put into the bank account specified on the withdrawal form.

An SMS notification will be issued to your EPFO-registered cellphone number. The money will be paid to your bank account once the claim is processed. Although there is no specific time limit set by the EPFO, funds are normally released within 15-20 days.

Documents Required For EPF Registration

The employer must attach the following documents to the “Registration Form for EPFO”:

1. PAN Card.

2. Proof of address, such as the Registered Office’s Electricity, Water, or Telephone Bill (not older than 2 months).

3. Aadhar Card.

4. Shop and Establishment Certificate/GST Certificate/any License issued by the government for the establishment.

5. Digital signature.

6. Entity’s Cancelled Cheque or Bank Statement.

7. If applicable, the Hired/Rented/Leased Agreement.

8. The Identifier/Licensing Authority issues License Proof.

Steps For EPF Registration for Employers

The employer needs to follow the given steps:

Step 1: Go to the EPFO Website and click on the “Establishment Registration” button on the homepage.

Step 2: RegistrationLog in On USSP (Unified Shram Suvidha Portal): The “Establishment Registration” button on the EPFO website’s homepage will take you to the USSP (Unified Shram Suvidha Portal) sign up page. The employer must use the “Sign Up” button. To create the account, the employer must enter the Name, Email, Mobile Number, and Verification Code on the next page and click the “Sign Up” button.

Step 3: Log in to the USSP: After creating an account on the USSP, the employer must log in and pick the “Registration For EPFO-ESIC” button on the left-hand side of the screen. Then, on the right side of the screen, click the “Apply for New Registration” button. The “Employees’ State Insurance Act, 1948” and the “Employees’ Provident Fund and Miscellaneous Provision Act, 1952” will appear as options. The employer must choose the “Employees’ Provident Fund and Miscellaneous Provision Act, 1952” and then click the “Submit” button.

Step 4: Filling the Registration Form: When the employer clicks the “Submit” button, the “Registration Form for EPFO” page opens, and all sections of the form must be completed.

• Next, Fill out the “Establishment Details” box and then click the “Next” button. Now Fill out the details in the “eContacts” box and click the “Add” button.
• Once the details have been entered, click the “Next” button. In the “Contact Person” section, click on the “Add/Edit Address of Primary Manager” button to add the address.
• Now, click on the “Add/Edit Econtact of Primary Manager” to add the email. Click on the “Add” button, enter the details of the “Other Contact Person”, and click on the “Next” button.
• Fill in the blanks in the “Identifiers” section and press the “Add” button. Once the details have been entered, click the “Next” button.
• Click on the “Employee Details” area and click the “Add” button to add the necessary details, then go to the next part of the registration form.
• Fill out the “Branch/Division” section and click the “Add” button.
• Once the details have been entered, click the “Next” button. Enter the NIC code, principal business activity, type of work, and subcategory of nature of work in the “Activities” box and click the “Next” button.
• Upload all necessary attachments in the “Attachments” section by clicking on the “Upload” button and then the “Save” button.
• The registration form summary will be displayed. Check the information in the registration form and click the “Submit” button.

Step 5: Attaching the Digital Signature Certificate: Click on the “Digital Signature” button on the next page and attach the Digital Signature Certificate. Once the employer’s DSC has been uploaded, the employer will receive a notification indicating that the registration form has been successfully completed.

The employer will also receive an email from the Unified Shram Suvidha Platform with a confirmation that the EPFO registration has been completed.

Frequently Asked Questions

1. What is UAN?

Answer: The Universal Account identifier (UAN) is a 12-digit identifier assigned to each employee of the Employees’ Provided Fund Organisation (EPFO) to enable him to manage his EPF accounts. It allows the individual to obtain all Provided Fund (PF) information in one location, regardless of the organization for which he works. The employee can effortlessly withdraw and transfer funds via the EPF UAN login portal with the help of UAN.

UAN stands for Universal Account identifier.

2. How to Activate UAN?

Answer: To use EPF services online, you must first activate your UAN through the EPF member login portal. To activate your EPF UAN, complete the steps outlined below:

Step 1: Go to the EPF member website, EPF e-SEWA/EPF Members Portal.

Step 2: In the upper right corner of the website, click the “Activate UAN” button.

Step 3: When the EPF member home dashboard appears, input your UAN/member ID, Aadhaar number, name, date of birth, and mobile number as they appear on EPFO records.

Step 4: Enter the captcha code and receive an authorization PIN on your EPFO-registered cellphone number.

Step 5: Online validate and activate the UAN using the One Time Password (OTP).

Step 6: Another message will be issued to confirm the UAN’s activation.

Step 7: Once your UAN has been activated, you can use it to check the status of your Provident Fund.

3. How to File EPF e-Nomination Online?

Answer: EPFO has made EPF nomination details necessary for members. Its purpose is to ensure that in the tragic event of the member’s death, the family receives the necessary savings that the person has generated during the job term. This is possible both online and offline. Members of UAN who have not filed their e-nominations will also be unable to access their EPF passbook online. To register an e-nomination, an EPFO member must provide the following information: Aadhaar number, name, date of birth, gender, relation, address, bank account details, and a photograph. The submitted information must then be confirmed using the e-Sign feature. Even though the deadline for EPF e-nomination filing was December 31, 2021, EPFO has extended the deadline for e-filing but has asked all members to do so as soon as possible.

5. What are EPF Tax rules?

Answer: Until 2020, EPF deposits and interest were totally tax-free. However, the government announced in Budget 2021 that beginning in FY22, if deposits in EPF and VPF (Voluntary Provident Fund) exceed Rs. 2.5 Lakh in a fiscal year, the interest generated on contributions exceeding Rs. 2.5 Lakh will be taxable. If the employer does not contribute to the EPF account, the interest component is exempted up to a deposit of Rs. 5 lakh in the fiscal year.

From FY 2021-22, the CBDT (Central Board of Direct Taxes) has mandated that two distinct PF accounts be maintained, one for taxable contributions and the other for non-taxable contributions. This means that PF payments above the threshold will be deposited in a taxable account, and the interest earned will be taxed beginning April 1, 2022. Furthermore, this change was implemented in an effort to rationalize the tax breaks offered to high-income earners.