If you are a working professional in India who wants to have a concrete retirement plan, the EPF account is the easiest way to get started.
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Why You Need to Know about the Employees Provident Fund Scheme
The Employees Provident Fund of India is one of the largest social security schemes in the world.
It is administered by the Employees Provident Fund Organisation (EPFO), which comes under the Ministry of Labour and Employment, Government of India. The EPF is only one of the three social security schemes that are administered by the EPFO, the three scheme being–
- Employees Provident Fund (EPF)
- Employees’ Pension Scheme (EPS) and
- Employees Deposit Linked Insurance Scheme (EDLI)
These schemes can be the pillars of your social security when you have retired from work.
If you are an employed person who is trying to plan out your retirement, having a concrete picture of Provident funds and EPF will help you get started with retirement planning, and with investing and savings.
What is a Provident Fund?
A provident fund is just another name for a Pension Fund. This amount can enable you to lead a stress-free life after retirement without having to rely on a job for a source of income.
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Pension funds are a source of Social Security. The fund guarantees a source of income, and therefore protection against sickness, injury and even loss of a breadwinner. When you decide to stop working, you can withdraw the amount that has been collected in the PF account, without having to pay the tax. You can use this lump sum for your post-retirement expenses.
Some provident funds give off a lump sum while others pay the amount as monthly payments.
What is the Employees Provident Fund (EPF)?
EPF, also known as the Employees’ Provident Fund is a Provident Fund that is mandated to Employers by the Government of India. It is a useful retirement fund that will allow you to use your salary to build a corpus of savings. You can withdraw the amount in those savings funds for your life after retirement.
How EPF Works
The Biggest advantage of EPF is that you don’t have to make any lump sum payments. Instead, a small monthly amount will be deducted from your salary. Over the years of your employment, this fund will become bigger. This sum can act as your emergency savings as well.
EPF versus Other Saving Schemes
Saving schemes are the right way to go if you are trying to channel your finances for old-age income security. But here’s a common Question– Is EPF better than other Saving schemes?
A common comparison is the one between EPF and PPF (Public Provident Fund). The major benefit of EPF is that EPF offers a comparatively higher Interest rate (8.1%) than PPF (7.1%).
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Unlike Private savings accounts, the interest that you earn on the EPF is tax-exempt. You also don’t have to pay tax when you withdraw a bulk amount from your EPF.
Moreover, you don’t have to worry about making individual deposits to a separate account. Once the EPF has been started and a UAN has been assigned, using the EPF will be a hassle-free experience.
How to Start an EPF Account
If you are an employee, you cannot register for EPF on your own. To get an EPF account and its benefits, you need to be working in an establishment that is registered with EPF. Establishments registered with EPF contribute a certain percentage of the EPF fund. This contribution is deducted from the salary of the employee. All companies with more than 20 companies must register with EPFO. If your organisation is already registered with the EPFO, you can register as a member in the EPFO portal using your EPFO UAN number. In the next section, you can read how to complete your registration in the EPF member portal.
EPFO Member Portal Registration for Employees
The UAN Member e-Sewa Portal is an online place where you can solve all of your EPF problems at once. Any information that you need regarding PF contributions, PF account balance and details of past employers can be found in the EPFO Member Portal.
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Before you can use the services in the portal, your UAN must be active. Here’s what you need to know about UAN.
What is UAN?
The Universal Account Number, also known as your PF account number, is a 12-digit unique number allotted by the EPFO. The UAN EPFO number will remain the same for you throughout your employment, irrespective of how many different companies you have worked in can be found in the EPFO Member Portal.
You must know your UAN to check for monthly credits and debits in your PF account. You don’t have to ask your employer for help when you use UAN to move and withdraw money.
Your UAN is created when your first employer registers you for PF.
Documents Required to Generate UAN
- Identity proof- Driving licence, passport, Voter ID, etc.
- Address proof- Recent utility bill rental or lease agreement, Ration card, etc.
- Bank account details- Account number and IFSC Code
- PAN card
- Aadhaar card
How to Get Your UAN Number
There are multiple ways to check your UAN number. Here’s how.
1. Check the UAN using EPFO’s SMS Service.
The easiest way to check your UAN is by using EPFO’s SMS service. If your UAN is already registered, all you need to do is the text “EPFOHO UAN” to 7738299899 from the phone number registered to the UAN.
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2. Check UAN from the EPFO Portal
If you already have access to the EPFO’s Unified Member Portal, here’s how you can check your UAN.
- Go to EPFO’s Unified Member Portal
- Click on the ‘Know Your UAN‘ option from the Important Links section.
- You will be taken to a page where you will be required to fill in your Mobile Number and fill in the Captcha.
- An OTP will be sent to your registered phone number, which you can use to log in to your UAN account.
3. Check UAN via phone.
To get your UAN details via phone,
- Call 011-22901406 from your registered mobile number.
- The call will be disconnected after two rings.
- Following this, you will receive an SMS with all the details of your PF.
How to Login to the EPFO Member Portal
Here’s how you can log into the UAN Portal (EPFO Member Portal) by following these easy steps
- Visit the Unified EPFO portal.
- Log in to the portal using your UAN number and password.
EPF Contribution Explained
The employer contributes an amount equal to 12% of the sum you get by adding basic wages, Dearness Allowance, and Retention Allowance. You, as an employee, will alsomake an equal contribution.
In total, an amount equal to 24% of your salary will be deposited in your EPF account every month.
Where does the Monthly EPF Contribution go into?
The EPF monthly contribution is broken down into Two Parts —
- 8.33% of each of the 12% salary contributions from both employer and employee goes into the Employees’ Pension Scheme (EPS).
- The remaining 3.67% goes to the Employees’ Provident Fund (EPF).
In addition, the employer has to give an extra 0.5% to the Employees Deposit-Linked Insurance Scheme.
What is EPS?
The Employees’ Pension Scheme (EPS) is another social security scheme that is provided by EPFO. Similar to the EPF, this scheme also targets individuals with salaries. Earlier, we saw how 8.33% of the monthly EPF contribution goes into the EPS. There is a maximum monthly contribution limit on EPS. An employee can contribute a maximum of ₹1250 per month to EPS.
EPF Exception for Smaller Companies
Smaller firms are exempted from the mandatory EPF registration. However, the employer can register voluntarily. If the employer company has fewer than 20 employees, both the employer and employee will contribute 10% each.
How to Opt-Out of EPF?
If your annual salary (basic pay plus dearness allowance) is less than 15,000, you must pay PF.
If not, you can opt-out of making EPF contributions. To opt-out of the EPF scheme, all you need to do is fill out EPFO’s declaration form.
The form will ask you to enter your details and mobile phone number.
After filling out this form, sign the undertaking, submit it to your employer, and state that you wish to opt-out of the scheme. Make sure that you do it immediately, as you won’t be able to avail of this option unless you make at least a single EPF contribution.
Here’s Why You Should Not Opt for EPF
When you decide to opt out of EPF, keep in mind the consequences. Sure, you get a bigger take-home salary, giving you a bigger disposable income, but
- You miss out on the employers’ share of the EPF contribution as well.
- You will miss out on the interest on your EPF deposit. EPF deposits have a government-approved interest rate of 8.1% as of FY 2021-22.
- Your PF contributions are Tax exempt under Section 80C. You will be missing out on legal means to avoid tax.
When you weigh the pros and cons, it becomes clear that it is better not to opt-out of the EPF.
How to Claim and Withdraw Your PF
You can apply to claim your PF partially or fully online or offline. You are only allowed to withdraw your PF completely once you are retired or have been unemployed for 2 months.
EPF Claim Application Procedure
1. How to Claim and Withdraw Your PF Offline
You can withdraw your PF offline in four easy steps.
- Download the Composite Claim Form from the EPFO website.
- There are two versions of the Composite EPF Claim Form – Aadhar and Non-Aadhar versions. If your Aadhar and Bank account details are not linked yet, fill out the non-Aadhar form, else fill out the Aadhar version of the form.
- After filling out the form, you can submit it at the respective Jurisdictional office.
2. How to Claim and Withdraw Your PF Online
To claim and withdraw your PF online,
- visit the Member e-Sewa Portal.
- Sign in using UAN and password.
- Select Claim (Form-19, 31, 10C & 10D) from the Online Services tab.
- After verifying your bank details, confirm the terms and conditions and select Proceed for EPFO Online Claim.
- Here you can select the reason for EPF withdrawal. Only the options based on your eligibility will be shown.
- Once these have been completed you have to give your address, mention the amount and upload the scanned copy of the required documents.
- Click on Terms and Conditions and select ‘Get Aadhar OTP’
- Enter the OTP that you received in your mobile phone number, and enter it in the box.
- Once the OTP has been successfully entered, the claim for EPF withdrawal will be submitted.
PF Withdrawal Process
There are certain conditions under which you are allowed to withdraw your PF online or offline. They are as follows–
- Retirement – If you have retired from employment at the age of 55, you can withdraw your PF.
- Unemployment – if you have been unemployed for 2 months, you can withdraw up to 75% of your total PF amount.
- Medical Purpose – If you are withdrawing PF for medical purposes, then there is no minimum service year required.
- Wedding – If you have a minimum of 7 years of service, you can withdraw from the EPF for your wedding.
- Repaying Home Loan – You can withdraw PF to repay your home loan if you complete 3 years of service life.
- Buying/Building/Renovating a House – If you have completed 5 years of service you can withdraw EPF for buying or building a house.
EPF Death Claim: How to Withdraw the PF of a Deceased Person
Here’s how you withdraw the PF of a deceased person as a Nominee-
- Visit the EPFO Member Portal
- Select the ‘Death Claim Filing by Beneficiary‘ option.
- Enter specific details such as
- The Beneficiary’s name
- PF UAN number
- Date of Birth,
- Aadhar
- Click on ‘Authorised Pin’. An OTP will be sent to the registered mobile number of the beneficiary. The beneficiary can enter the OTP and file the death claim.
EPF Transfer Online
Sometimes you may create a new EPF account when an old one already exists. This usually happens when you change employers and your new employer creates a new EPF account. Not to worry, you can easily transfer the funds from your old EPF account to your new one.
The entire process can be done online, too.
Eligibility for EPF Online Transfer
To be able to transfer your EPF funds from your old account to your new one, you need to fulfil these requirements:
- You need an active UAN. This can be done easily in the EPF portal. Your mobile
number that you used for activation must also be active. - The employer should have verified your bank details such as your account number and IFSC code.
- Your Aadhar should have been seeded in the UAN account.
- The Date of Joining and date of Exit should be mentioned in the portal correctly along with
the reason for exit - You can only have one transfer request against one member ID will be accepted by the EPFO.
Documents Required for Online EPF Transfer
Here is a list of documents that you need to start the online EPF transfer process–
- Current employer’s details
- Establishment Number
- Account Number
- PAN Card/ Aadhar Card/Driving License)
- UAN
- Bank account details of the salary account
- Old and current PF account details
- Revised Form 13
Steps to Transfer EPF Online
- Login to your EPF account using your UAN
- Click on the One Member – One EPF account (Transfer Request) option in the Online services section.
- Verify your personal information and the present PF account details.
- Go to Get Details to view PF account details of previous employment.
- Choose your previous employer or present employer for attesting the claim and provide member ID and UAN required fields.
- Click Get OTP, enter the OTP you received in the space, and click. Submit
- An online, Login to your EPF account using your UAN
- Click on the One Member – One EPF account (Transfer Request) option in the Online services
section. - Verify your personal information and the present PF account details.
- Go to Get Details to view PF account details of previous employment.
- Choose your previous employer or present employer for attesting the claim and provide
member ID and UAN required fields. - Click Get OTP, enter the OTP you received in the space, and click. Submit
- An online, filled PF transfer request form will be generated. You have to self-attest and
submit the form in PDF to your employer. The employer will also receive an online
notification about your EPF transfer request form. - The employer will approve your PF transfer request digitally. Once this has been approved,
the PF is transferred to the new account with the current employer. You will get a tracking ID
that can be used to track the application online. - PF transfer request form will be generated. You have to self-attest and submit the form in PDF to your employer. The employer will also receive an online notification about your EPF transfer request form.
- The employer will approve your PF transfer request digitally. Once this has been approved, the PF is transferred to the new account with the current employer. You will get a tracking ID that can be used to track the application online.
How to Check Your EPF Balance Online
There are a few ways in which you can check your EPF balance. Here are three easy ways you can use them:
1. Using the Umang App
On your phone, install the Umang app. This app provides access to various Government services, including PF. You can view your EPF member passbook, raise claims, and even track claims using the app.
2. Using the EPFO Portal
If you log in to the Unified EPFO portal, you can access and check your PF passbooks online from the websites run by EPFO. You need your UAN number to check your PF balance. Here’s how–
- Login to the EPFO member portal at www.epfindia.gov.in
- Click on ‘For Employees’ under ‘Our Services.
- Click on ‘Member passbook’
- You will be asked to enter your UAN number and password.
You can see your passbook here.
3. Using the SMS Service
for EPF balance inquiries If you log in to the Unified EPFO portal, you can access and check your PF passbooks online from the EPF Portal. Here’s how–
- Login to the EPFO member portal at www.epfindia.gov.in.
- Click on For Employees under Our Services.
- Click on ‘Member passbook
- You will be asked to enter your UAN number and password.
You can see your passbook here.
3. Using the SMS Service
For EPF balance inquiries via the phone number, Send “EPFOHO UAN” to 7738299899 from your
registered mobile number, and you will receive an SMS containing your PF balance details.
How Can NoBroker Help
If you are just getting started with your career, setting up an EPF is perhaps the first step in retirement financial planning. Retirement planning shouldn’t be exhausting or overwhelming.
Here’s where NoBroker Legal Services can assist you. Our team of experienced lawyers can help you make a step-by-step plan for your retirement with goals you can reach.
Contact NoBroker Legal Services to figure out your post-retirement financial planning.
FAQs
1. How can I locate the jurisdictional EPFO office near me?
To find the Jurisdictional office of EPFO near you,
Go to the EPFO Member Home official website.
Choose ‘Locate an EPFO Office’ from the Services Tab
Select your Home State and District from the drop-down menus and hit Submit.
The Contact details of the EPFO Regional Office will be displayed
2. Is it mandatory for employers to register with EPFO?
If a company has more than 20 employees, it does not have to register under EPFO. But they can opt for EPFO voluntarily.
3. How can I check my EPF balance online?
To check your EPF balance online, all you need to do is send the SMS “EPFOHO UAN” to 7738299899 from your registered mobile number. Your EPF balance will be sent to your phone in the form of an SMS.
4. How much will I get as PF?
The monthly employee PF contribution is the sum of employer and employee contributions. Both the employer and employee will be contributing 8.33%. So to calculate the total monthly PF contribution, calculate 16.66% of your basic pay.
5. When can I withdraw my PF?
You cannot withdraw your PF at any point in time. A typical scenario where you can withdraw your PF is when you are unemployed for more than 2 months.
6. How can I check my PF claim status?
The easiest way to check your EPF claim status is to call 011-2290-1406 from your EPF-registered mobile phone number. Your claim status will be sent as an SMS to your phone number.
