Here’s some information about EPF contributions for 2024:
- Interest rateThe interest rate for EPF contributions made between April 2023 and March 2024 is 8.25%. This interest is calculated monthly, but credited to the account on March 31st of the financial year.
- Contribution limitsEmployees contribute 12% of their salary to EPF, up to a maximum of Rs 23,000 per month. Employers also contribute 12% of their employee’s salary to EPF.
- Dormant accountsIf an employee doesn’t contribute to their EPF account for 36 months in a row, the account becomes dormant. Interest is still credited to dormant accounts for employees who haven’t reached retirement age, but not for retired employees.
- WithdrawalsEmployees can withdraw the principal amount and interest earned upon retirement. Employees over 54 can withdraw 90% of their accumulated balance, and employees who are unemployed for 60 days or more can withdraw their entire balance.
- Voluntary contributionsEmployees can contribute more than the mandatory 12% rate, up to a total of Rs 15,000 per month.
EPF stands for Employees’ Provident Fund, which is a savings scheme created for employees in India. It is a mandatory contribution scheme where both the employer and employee make regular monthly contributions. The funds accumulated in the EPF account are meant to provide financial security and stability for employees after retirement. This scheme also offers partial withdrawals for specific purposes like buying a house, medical emergencies, or education. The EPF is managed by the Employees’ Provident Fund Organization (EPFO), overseen by the government to ensure employees’ financial well-being.
Eligibility for EPF Contribution
Employees Provident Fund (EPF) is a scheme in India that provides various benefits to employees. To be eligible for the EPF scheme, certain criteria must be met:
- All states in India are covered under the EPF scheme, allowing employees from any state to benefit from it.
- It is mandatory for salaried employees earning up to ₹15,000 to have an EPF account.
- Employees earning more than ₹15,000 can also register for an EPF account, but it requires approval from the Assistant PF Commissioner.
- Organizations with a workforce of 20 or more employees are required to register for the EPF scheme.
- Organizations with less than twenty employees have the option to voluntarily join the EPF scheme.
Types of EPF Forms
There are several types of EPF forms used for various purposes related to the Employees’ Provident Fund (EPF) in India. Here are some commonly used EPF forms along with their meanings:
- Form 19: This form is used for the final settlement of an EPF account when an employee leaves their job, retires, or becomes incapacitated. It is used to claim the EPF balance, including the employee’s contribution, employer’s contribution, and any applicable interest.
- Form 31: This form is used for partial withdrawals from the EPF account before the employee’s retirement. It can be used for various purposes such as medical emergencies, home loan repayments, education, marriage, or construction of a house.
- Form 13: This form is used for transferring the EPF balance from one employer to another when an employee changes jobs. It is used to initiate the transfer process and consolidate the EPF balance into a single account.
- Form 20: This form is used to claim the EPF amount in the event of the death of an EPF account holder. It is used by the nominee or legal heir to apply for the settlement of the EPF account.
- Form 11: This form is used for providing declaration and nomination details by new EPF members to their employers. It includes information such as name, address, family details, and nominee details.
These are just a few examples of the EPF forms used for different purposes. It’s important to note that the EPF forms may be revised or updated periodically, and it is advisable to refer to the official EPF portal or consult with the concerned authorities for the latest versions and guidelines related to EPF forms.
Benefits of EPF Contribution
EPF contribution provides a number of benefits to employees, including:
- Tax Benefits: EPF contribution is tax-free, which means that the money you contribute towards your EPF account is exempt from income tax. This helps you save more money in the long run.
- Long-Term Investment: EPF contribution is a long-term investment that helps you build a retirement corpus over time. The interest earned on your EPF account is compounded annually, which means that your savings will grow over time.
- Withdrawal Flexibility: Partial withdrawals are allowed for specific purposes like housing, medical emergencies, education, etc.
- Transferability: EPF accounts are transferable when changing jobs, ensuring continuity of savings.
- Social Security: EPF serves as a social security net, providing income after retirement for a decent standard of living.
EPF Contribution Rules
- Contribution Percentage: Both the employee and employer are required to contribute a fixed percentage of the employee’s salary to the EPF account. The current contribution rate is 12% of the employee’s basic salary plus dearness allowance (DA).
- Salary Threshold: EPF contribution is mandatory for employees with a basic salary plus DA of up to ₹15,000 per month. For employees earning above this threshold, it is optional, subject to approval from the Assistant PF Commissioner.
- Split of Contribution: The employee’s contribution is deducted from their salary, and the employer contributes an equal amount. The entire contribution is deposited into the employee’s EPF account.
EPF Interest Rates for the Last 15 Years
| Financial Year | Rate of Interest p.a. |
| 2023-2024 | 8.25% |
| 2022-2023 | 8.15% |
| 2021-2022 | 8.10% |
| 2020-2021 | 8.50% |
| 2019-2020 to 2020-2021 | 8.50% |
| 2018-2019 | 8.65% |
| 2017-2018 | 8.55% |
| 2016-2017 | 8.65% |
| 2015-2016 | 8.80% |
| 2013-2014 to 2014-2015 | 8.75% |
| 2012-2013 | 8.50% |
| 2011-2012 | 8.25% |
| 2010-2011 | 9.50% |
| 2005-2006 to 2009-2010 | 8.50% |
How EPF Contribution is Calculated?
The EPF contribution in India is calculated based on the employee’s basic salary plus dearness allowance (DA). The employee contribution is fixed at 12% of the sum of basic salary and DA. The employer also contributes an equal amount of 12% of the employee’s basic salary and DA.
Here’s an example to illustrate the calculation:
Let’s assume an employee’s basic salary is ₹20,000 per month and the DA is ₹5,000 per month.
Employee contribution:
12% of (₹20,000 + ₹5,000) = 12% of ₹25,000 = ₹3,000
Employer contribution:
12% of (₹20,000 + ₹5,000) = 12% of ₹25,000 = ₹3,000
So, in this case, the employee and employer would each contribute ₹3,000 towards the EPF account.
It’s important to note that the EPF contribution is based on the basic salary and DA, and it does not include other allowances or components of the salary. The maximum limit for EPF contribution is currently set at ₹15,000 per month. If the employee’s basic salary and DA exceed this limit, the contribution is calculated based on the limit.
It’s advisable to consult the EPF guidelines and consult with the employer or EPFO for accurate calculations and details regarding EPF contributions.
EPF contribution is an important savings scheme that all employees in India should understand and participate in. By regularly contributing to your EPF account, you are creating a financial safety net for your future. Currently set at 12%, the EPF contribution rate may potentially increase to 14% in the future. However, regardless of the rate, it is crucial to consistently contribute to your EPF account to ensure a secure and comfortable retirement. Make it a priority to stay informed and actively participate in this valuable savings opportunity.
Taxation on EPF Interest
An employee’s contribution to the EPF account above Rs. 2.5 lakh in a financial year is taxable in the hands of the employee. The interest accumulated for above Rs. 2.5 lakh contributions is also subject to TDS. However, the interest accumulated on EPF contibutions within Rs. 2.5 lakh are tax-free. The interest collected on dormant accounts is taxable in the hands of the member.
Employees can claim tax deductions on EPF contributions up to Rs. 1.5 lakh under Section 80C of the Indian Income Tax Act, 1961. In addition, there will be no tax deduction on EPF partial withdrawal when the PF funds are withdrawn after 5 years of continuous contribution to the account.
Related info
EPFO Raises Provident Fund Interest Rate to 8.25% for 2023-24
The Employees’ Provident Fund Organisation (EPFO) has announced an increase in the interest rate for employees’ provident fund to 8.25% for the year 2023-24. This is the highest rate in three years. The decision was made by the EPFO’s Central Board of Trustees and is awaiting approval from the Ministry of Finance. Once approved, the new interest rate will be credited to the accounts of over six crore EPFO subscribers.
EPFO Discontinues Acceptance of Aadhaar Card as Proof of Date of Birth
The Employees’ Provident Fund Organisation (EPFO) in India has announced that it will no longer accept the Aadhaar Card as proof of date of birth. The decision was made with the approval of the Central Provident Fund Commissioner (CPFC). Instead, the EPFO will now consider other documents as valid proof of date of birth, such as marksheets from recognized government boards or universities, school leaving certificates, PAN cards, and passports. The Aadhaar Card is primarily an identity verification tool and not a proof of birth, according to the EPFO. This change was made in response to a directive from the Unique Identification Authority of India (UIDAI).
Methods to Check EPF Balance both Online and Offline
1. EPFO Portal
To check your EPF balance on the EPFO portal, ensure that your UAN (Universal Account Number) is activated. Once activated, follow these steps:
- Log in to the EPFO portal using your login credentials.
- Click on the “Our Services” tab.
- From the dropdown menu, select the “For employees” option.
- Under the “Services” tab, click on the “Member Passbook” option.
- On the subsequent login page, enter your UAN and password.
- After providing the correct details, you will be logged in to your EPF account.
- From there, you can easily access your EPF passbook and view your current EPF balance.
2. UMANG Application
You can download the UMANG application, also known as the “m-Sewa app of EPFO,” on your mobile device to check your EPF balance. Here’s how:
- Open the UMANG application and look for the “EPFO” option on the home screen, under the “Employee Centric Services” section.
- Click on the “Member” option, followed by the “Balance/Passbook” option.
- Enter your UAN and registered mobile number.
- After successful verification, you will be able to view your updated EPF balance.
- If the provided UAN and mobile number are not linked, the system will display a mismatch error message.
Offline Ways to Check EPF Balance
For individuals who are not well-versed in technology, there are a few offline methods to check EPF balance as well. Here’s a brief explanation:
1. SMS
If you have linked your UAN with your KYC details, you can check your EPF balance by sending an SMS in the following format to the designated mobile number:
EPFOHO UAN [Language code]
Replace [Language code] with the first three letters of your preferred language. For example, if you prefer English, you can use “ENG” as the language code. The SMS should be sent to 7738299899.
2. Missed Call
Additionally, you can check your EPF balance by giving a missed call to 011-22901406 from your registered mobile number. However, it’s important to ensure that your UAN is linked with your KYC details for this service to be available. After giving the missed call, you will receive an SMS alert containing your EPF details.
FAQs
Is EPF interest credited monthly or yearly?
The EPF contribution is credited to the EPF account every month, and interest is computed monthly. However, the total interest for the entire financial year will be credited at the end of the financial year.
Is the EPF interest rate fixed or variable?
The EPF interest rates are fixed by the government. The government revises the interest rate from time to time. Currently, the government has fixed the EPF interest rate for the financial year 2023-24 at 8.25%.
What is the method of crediting EPF interest to the subscribers?
The compound interest is credited monthly at the statutory rate declared by the government for each year. For 2023-24, the interest rate declared is 8.25%.
Will EPF interest be credited to my account even when there is no EPF contribution?
Yes, EPF interest will be credited to an account even when there has been no contribution for 3 years. Thus, if your EPF account has no contribution due to unemployment or Non-Resident Indian (NRI) status, you will get interest for 3 consecutive years from the stopping of contribution.
Till what time will I get EPF interest in my account?
You will get EPF interest for up to 3 years after retirement. After 3 years of no contribution to your EPF account, it becomes inoperative and will not earn any interest.
Will I face a loss when there is a delay in the updation of EPF interest in my passbook?
No, you will not suffer any financial loss if there is a delay in updating the interest in your passbook. Updating the member passbook with EPF interest is an entry process. The date on which the EPF interest is entered in the member passbook has no financial bearing as the interest earned for the year is added to the closing balance of that year, and it becomes the opening balance for the next year.
Does PF interest stop after certain number?
If the contribution to PF account is not for 3 years consecutively shall not earn any interest after 3 years from stopping contribution.
Is 100% withdrawal of PF amount withdrawable?
If the individual is unemployed for the next 2 months then they can withdraw 100% of amount.
Will the interest accumulate if I don’t withdraw balance from my PF account?
Yes, interest on PF account will continue to accumulate and the account will be active.