Employee Provident Fund (EPF) is a retirement benefit scheme governed by Employee Provident Fund Organisation (EPFO). Both employer and employee contribute to the scheme throughout the tenure of the employment. The employee can withdraw the same during retirement. One can use a EPF calculator to estimate the corpus that they would accumulate at the time of retirement. Scripbox's EPF calculator is available online and is free to use.
What is EPF?
Employee Provident Fund (EPF) is a collection of funds that both the employer and the employee contribute on a monthly basis. It is a scheme that provides financial support to all salaried individuals post-retirement.
EPF is the main scheme under the Employees Provident Fund and Miscellaneous Provisions Act, 1952. The Employees Provident Fund Organisation (EPFO) backs this scheme. It is mandatory for an organization that has more than 20 employees to register under the EPF Act.
In an EPF Scheme, an employee has to pay a certain amount from his salary towards the scheme. However, the employer pays an equal amount as well. This amount so contributed on a monthly basis further helps in providing monetary benefit to the employee after his retirement.
EPF is basically a retirement benefit plan and aims to ensure a financially independent retirement.
Features of EPF
Employee Provident Fund EPF aims at building retirement savings. It is a kind of savings scheme for salaried individuals across the country. Through this scheme, one can build a corpus with contributions from both employee and the employer.
Under the EPF Act, an employee is eligible for the provident fund, pension, and insurance benefits.
Under the EPF Act, the EPFO operates 3 schemes namely, Employees Provident Fund Scheme (EPF), Employees Pension Scheme (EPS), and Employees Deposit Linked Insurance Scheme (EDLI).
Some of the important features of EPF are as follows:
- Under the EPF Scheme, the interest that one earns fully exempt from tax. EPF offers tax-free returns. Not to mention, any amount withdrawn after completing 5 years of employment, the withdrawal is tax-free along with no TDS deduction.
- Any contribution made by the employee towards the EPF Fund is tax-deductible under section 80 C of the Income Tax Act.
- The employee can withdraw the fund before its maturity during emergencies like medical or financial emergencies.
- An employee can nominate any of his family members as a nominee. Hence, at the time of his/her demise, the nominee can claim the corpus so built. In case the employee is the sole bread earner of the family, this will help them overcome the financial crises.
- In the EPF fund, the employee can to withdraw the accumulated amount 2 months after his/her resignation.
- If an employee wishes to resign from his work for any reason whatsoever, he may withdraw the remaining EPF balances.
- The employer also contributes towards the employee’s pension fund along with EPF. The employee can use this post-retirement.
- An employee also gets a life insurance cover under the EPF Fund. Hence, in case of the certain demise of the employee, the nominee may claim insurance.
- An employee can also invest more than the basic 12% of his salary towards the EPF Fund under the provisions of the Volunteer Provident Fund.
Benefits of EPF
EPF comes with an array of benefits to the employees. A meager contribution from both the employee and the employer helps the employee achieve financial stability post-retirement. It inculcates a feeling of future security in them.
It is a kind of investment planning by both the employee and the employer.
The following are the benefits of the Employee Provident Fund:-
- Corpus for Retirement: A minimum contribution of an employee towards the EPF scheme is 12%. Hence every employee earning over Rs. 5000 or more every month is required to pay 12% of his/her salary towards the EPF Scheme. This contribution helps in the long term to build a corpus. This corpus would help establish financial stability and security post-retirement. This will further help an employee lead a stress-free life after his retirement.
- Emergency Corpus: The EPF scheme helps overcome emergencies like medical or financial or any other unforeseen emergency. This will help him/her use the corpus in any such uncertainties arising in life.
- Premature Withdrawal: EPF comes with easy and hassle-free premature withdrawals. Employees can also partially withdrawal in cases of emergencies. The scheme allows employees to withdraw the fund before its maturity during emergencies.
- Tax Saver: Under the EPF Scheme, any interest earned is fully exempted from tax. EPF offers tax-free returns. Hence, any withdrawals made after the maturity of the fund are non-taxable. Any contribution made by the employee towards the EPF Fund is tax-deductible under section 80 C of the Income Tax Act.
What is an EPF Calculator?
Employees PF calculator is an online tool that helps in estimating the EPF corpus on retirement. All you need to provide is basic details like retirement age, basic monthly salary, annual expected salary increase and contribution to EPF.
With the estimated value on retirement, you plan your retirement. You can estimate whether or not the corpus created meets your financial need on retirement. Accordingly, whether you need to invest more in other investment alternatives to meet the financial needs.
How to use Scripbox’s EPF Calculator?
Scripbox’s EPF calculator is an online free tool that helps in calculating the corpus on retirement. This helps an employee to determine the EPF corpus. The epf calculator also helps an employee know how much he should contribute to get a specific return post-retirement. This further helps him/her set the financial goal.
To use the Scripbox’s EPF calculator all you have to do is give the required details like age, expected retirement age, basic salary, expected annual increase in salary etc.
Let us look into the step by step process on how to use the Scripbox’s EPF Calculator:
- Firstly, enter your age on Scripbox’s EPF Calculator.
- Next, enter your desired age of retirement, basic salary and expected annual increase in salary.
- Then enter your contribution and employer’s contribution to the Provident Fund.
- Finally enter the current interest rate.
EPF Interest Rates FY 2021-22
The interest rate is regulated every year by the Central Government of India. The EPF interest rate is reviewed every year after consultation with the Ministry of Finance by EPFO’s Central Board of Trustees. The current EPF interest rate for the FY 2021-22 is 8.10%
Though the interest rate is regulated on a yearly basis, it is calculated on a monthly basis. Thus the interest rate is calculated by dividing the per annum rate with 12.
The EPF interest rate for the past 10 years is mentioned below:
|Financial Year||EPF Interest Rate|
How to check EPF balance online?
The EPF account balance can be checked online. It is an easy process and one does not need to wait for the employer to share the current EPF balance at the end of the year. As an employee or a member of the Employee Provident Fund, you have online access.
You can check your EPF Balance in four different ways. They are:
Using the Umang App
You can check your Provident Fund balance using your mobile phone. This is done with the help of the Umang App. All you need to do is follow the following simple steps:
- Firstly, you have to download the Umang App on your phone
- Secondly, to get started you have to complete the one-time registration process using your phone number.
- Thirdly, once the registration is complete you have access to view your passbook, raise a claim, and even track the claim using the app.
EPFO Member E-Sewa Portal
Users can now have access to their provident fund passbooks on different websites run by the EPFO.
To view the provident fund passbook on the portal you need to have your account tagged with your Universal Account Number (UAN). You have access to download or print your EPF passbook from the website. You can view your passbook online by following the below steps:
- Log on to www.epfindia.gov.in. The member passbook is available here.
- Now click on the “For Employees” section which is under the “our services” section.
- Click on the “Member Passbook”. This you will find under “Services”.
- This will take you to the sign-in page. Now you have to sign in using your online Id and Password. Once login is complete you will be able to see your passbook. You can either download it or take a print out of the same.
However, it is very important for an employee to have his/her UAN activated before using the online service. Though UAN is provided by the EPFO the same is verified and activated by the employer.
It is to be noted that the passbook facility is not available for members of establishments exempted under the EPF Scheme, 1952. You should contact your employer to check your EPF balance.
SMS service is also available to the Employees whose UAN is registered with the EPFO. You can get details of the latest contribution and PF balance by sending an SMS to 7738299899 from your registered mobile number.
You need to send “EPFOHO” followed by your UAN registration number and the language preferred like “ENG” for English. Hence you can send the first three letters of the preferred language. The service is available in 10 different languages
You can also give a missed call to 011-22901406 from your registered mobile number. However, you have to make sure that your UAN is linked with your bank account number, Aadhar and PAN. If not you can ask your employer to link them for you.
How to transfer EPF money online?
An employee can by using the online service of EPFO transfer and withdraw their Provident Fund Balance. The EPFO has introduced an online system to facilitate transfer claims and withdrawals by its members.
Therefore, this online system enables an employee to transfer his/her provident fund balance from the previous employer to a new employer. Alternatively, an employee can also make a partial or complete withdrawal of his PF balance easily.
In the online transfer of PF, an employee has the option of getting his/her claim attested with the previous or present employer. After an application is submitted by an employee for transfer the same is verified by the employer. This is approved by the employer and submitted online through the portal.
There are certain eligibility criteria an employee needs to fulfill before transferring the EPF online.
To transfer the EPF money online one has to follow the below-mentioned steps:
- Firstly, log on to the EPFO Member’s Portal using your UAN and password.
- Secondly, on the main menu go to the ‘Online Services’ tab and select ‘Transfer Request’ to generate an online transfer request.
- Thirdly, after you click on the ‘Transfer Request’ tab a new page will open. This page will show all your personal details like EPF number, date of birth, and date of joining. Don’t forget to verify all the details before proceeding further. This will make sure that your claim is processed correctly.
- Fourthly, after you verify your personal details go back to step 1. Here you have to provide details of the previous employer. Don’t forget to select whether the claim form attestation is from a previous employer or present employer.
- Fifthly, after you fill the details of the previous employer and submit the same online, an OTP will be sent to your registered mobile number. You will have to enter the OTP and verify your identity.
- Once this is done an online filled-in form will be generated. You will have to sign the form and send the same to your previous or present employer.
- At this stage, the employer will get a notification about the EPF transfer request. Therefore, after the employer verifies the claim the same is digitally forwarded to the EPFO Office which will then process the claim.
- Once the online transfer request is submitted you can check the status by clicking on the ‘Track Claim Status’ menu. This you will find under the ‘Online Services’ menu.