EPF (Employees’ Provident Fund): Full Form, Features, and Rules

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What is the Full Form of EPF?

The full form of EPF is Employee Provident Fund, & it is mandatory for private & and public companies with 20 or more workers. 

What is EPF?

The Employee Provident Fund (EPF) is a government-managed retirement savings scheme intended to help employees lead a comfortable life post-retirement through a lump sum amount & a monthly pension paid with interest. 

What are the Key Features of EPF?

The key features of the Employee Provident Fund include:

1. Employee & Employer typically contribute 12% (Basic + DA (Dearness Allowance) towards EPF.
2. Employees’ entire 12% EPF contribution towards EPF, whereas the employer contribution is split into 3.67% EPF & 8.33% towards EPS (Pension).
3. Currently, the interest rate offered against EPF is 8.25% per annum (reviewed annually).
4. Employee’s EPF contribution is eligible for a tax deduction under Section 80C (up to Rs. 1.5 lakh)
5. The interest earned towards the Employees’ Provident Fund is generally exempted from taxes. However, contributions exceeding Rs. 2.5 lakhs (Rs. 5 lakhs for a government employee) in a financial year is taxable under the IT Act. 
6. An EPF member must complete a minimum of 10 years of service & attain the age of 58 years to get eligibility for a monthly pension.

What are the EPF Withdrawal Rules?

1. The 13 withdrawal provisions have now been simplified into 3 categories: Essential Needs (Illness, Education, Marriage), Housing Needs, and Special Circumstances.
2. Currently, the minimum service requirement for making a partial EPF withdrawal is fixed at 12 months. 
3. In case of unemployment, an EPF member can withdraw 75% EPF after one month and the remaining 25% after 12 months of continuous unemployment. 
4. For partial withdrawals, EPF members may not submit any documentation and enjoy automated claim settlements. 
5. Withdrawal before 5 years of continuous service is taxable, and TDS will be levied based on PAN submission. 

Frequently Asked Questions (FAQ)

1. Can I have multiple EPF accounts?

Yes, if you change jobs, you may have multiple EPF accounts, later mergeable via UAN.

2. What happens to EPF after leaving a job?

Your EPF remains active and continues earning interest until withdrawal or job change.

3. Can NRIs contribute to EPF?

No, once an employee becomes a non-resident Indian (NRI), EPF contributions are not permitted. 

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