The Employees’ Provident Fund Organization (EPFO) works to provide provident fund benefits to salaried employees. Any employee is concerned about their future after retirement. In this regard, through the medium of the Employees’ Provident Fund Organization, an individual can secure their future with the help of the Provident Fund (PF) they receive.
Every salaried employee contributes 12% of their monthly salary towards the Provident Fund (PF) as part of the Employee Provident Fund Organization. Through the pension provided under the Employees’ Provident Fund Organization, not only is the employee’s future secured, but they also receive various other benefits in addition to the pension. In this article, we will provide a detailed explanation of the benefits available to any employee under the EPFO.
Benefits Of EPFO
Usually, when an employee associates with the Employees’ Provident Fund Organization, they can get many social security schemes. These include interest on deposited funds, pensions, and insurance benefits. Below, we have provided detailed information about the significant benefits available to any employee under the EPF.
Tax benefits, and Exemption
Employees who deposit their provident fund under EPFO, receive tax benefits. This means that all employees from whose salaries the provident fund contribution is deducted each month are provided relief in the tax system.
However, under the current rules of the tax system, there are no tax benefits for employees. However, older employees who deposit their provident fund under the Employee Provident Fund Organization still receive some level of tax relief, subject to specific criteria.
Benefits of Free Insurance
Employees who deposit their provident fund with EPFO are also eligible for insurance by default. All such employees are eligible for insurance coverage of up to six lakh rupees.
Under the Employee Deposit Linked Insurance (EDLI) scheme, employees registered with EPFO are insured for up to six lakh rupees. If an unfortunate demise occurs during the period of an employee’s employment, the insurance amount is provided to the deceased employee’s nominee. The benefit of the insurance scheme is extended to the employees of both the central government and other companies.
Money Withdrawal Facility
Employees who deposit their provident fund under EPFO have been provided with a very beneficial provision in case of emergencies. In cases of dire need, such employees can withdraw money from their provident fund.
It is commonly seen that some employees may need to take a loan in emergencies. In such cases, the financial situation of that employee becomes even more challenging. Therefore, considering all these factors, employees can withdraw money from their provident fund, which is available under the Employee Provident Fund Organization.
Some employees who are eligible for a pension under EPFO may, for various reasons, not be able to maintain their provident fund account, and their account becomes inactive. Even these inactive provident fund accounts now earn interest on the deposited amount. However, this provision did not exist before 2016.
According to the laws before 2016, employees with inactive provident fund accounts that remained dormant for more than three years did not receive any interest on the deposited amount. But, under the new laws introduced after 2016, all such employees receive interest on the amount deposited in their dormant provident fund accounts.
Pension is Received after Retirement
Under EPFO, a 12% deduction is made from the salary of all registered employees every month. This entire amount is provided to the employee as a monthly pension after retirement. Of the contributions made to the PF account, 8.35% is allocated to the Employee Pension Scheme (EPS).
This entire amount turns out to be quite significant as a financial support for employees in their old age after retirement. Therefore, the Employee Provident Fund Organization pays full attention to ensuring that no employee faces financial difficulties in any way after their retirement.