EPF Account is a retirement scheme. This scheme is available only to salaried employees. The fund is maintained and operated by an organisation known as Employee Provident Fund Organisation of India. Every company which consists of more than 20 employees should compulsorily register with EPFO.
Listed below are few features that will help one understand EPF better.
1. It is a retirement scheme
2. Both the employers and employees make contribution in this scheme
3. Employees transfer 12% of their salary to the EPF account
4. EPF account is managed and handled by Employee Provident Fund Organisation
5. EPF accounts earn a return of 8.75% annually
6. The EPF account qualifies for tax benefits where the amount invested in the account is exempted from tax under section 80C of the Income Tax Act, 1961.
7. In EPF, the retirement amount is paid at the time of retirement or resignation, whichever comes first
8. In case of a job change, one can transfer the amount from the old company to the new company
9. Return on EPF does not attract taxOne can check their EPF balance online without any hassle
10. Easy to apply for
Mobile app and EPF
Many investors were apprehensive about investing in EPF in the initial days owing to the fact that there was not much transparency. But a lot has changed since the introduction of the scheme by EPFO. EPFO has introduced reforms aimed at making the whole process very easy for the investors. It started by making the withdrawal procedure very easy for the investors. Unlike before, employees no longer need the permission of the employer to withdraw money from the scheme as long as the subscriber’s details have been linked to the EPF Universal Account Number.
The organisation is planning to make it more easier by doing away with any paperwork for withdrawing the PF money by launching an online PF withdrawal facility. EPFO has also launched a mobile app which is SMS based, Universal Account Number activation and a missed call service.