EPF Account: What is Employees’ Provident Fund Scheme? Here Are 5 Benefits of PF Account

If you are a salaried employee, then you know that your company deducts a part of your salary towards the EPF account or the Employees’ Provident Fund account. EPF, also known as PF, is a fund collected by the Employee Provident Fund Organisation (EPFO), which comes handy during any urgent requirement or after your retirement.

Typically, both the employee and employer contribute 12 percent of basic salary towards the EPF account where the firm's contribution is separate. EPFO-Linked Atmanirbhar Bharat Rozgar Yojana Launched by FM Nirmala Sitharaman to Boost Employment & Create Jobs; Check Details of Benefits.

What is the EPF Scheme?

EPF or PF is a retirement benefits scheme, under which employers and employees make an equal contribution towards the scheme. The contribution is 12 percent of the employee's basic salary. After retirement, the employee gets a lump sum amount with interest.

Here Are FIve Benefits of EPF or PF:

• Employee's contribution towards PF account is eligible for tax exemption under Section 80C of the Income Tax Act.
• EPF offers a lifelong pension scheme under the Pension Scheme 1995 (EPS).
• Government has allowed partial withdrawal of funds in the wake of the pandemic, unemployment, higher education, marriage, illness, etc.
• EPF accounts earn high returns. For this financial year, the EPF interest rate is 8.5 percent.
• If the EPFO member has been contributing towards the fund in a regular way, then there is an insurance cover provided by the EPFO. In the event of EPFO member's death, the family can avail the benefit of Insurance Scheme 1976 (EDLI).

Meanwhile, on November 12, Finance Minister Nirmala Sitharaman announced Atmanirbhar Bharat Rozgar Yojana, an employee incentive scheme, under which the government will provide the subsidy for provident fund contribution to firms registered with the EPFO. Under the scheme, the centre will provide the subsidy for two years for workers who lost jobs between March 1, 2020, to September 30 and for new workers employed on or after October 1.

(The above story first appeared on LatestLY on Nov 19, 2020 10:48 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).