Employee Provident Fund - Definition, What is Employee Provident Fund, Advantages of Employee Provident Fund, and Latest News - ClearTax (2024)

FAQs

Employee Provident Fund - Definition, What is Employee Provident Fund, Advantages of Employee Provident Fund, and Latest News - ClearTax? ›

Benefits of Employees Provident Fund (EPF)

The Employee Provident Fund (EPF) is a retirement benefits scheme in which employees of an organisation contribute a small portion of their basic pay monthly. In the same line, the employer also contributes a similar amount on their behalf towards the scheme.

Both EPF & PPF are backed by the government. EPF offers stability through mandatory contributions from both employees and employers. PPF, on the other hand provides fixed interest rate, providing safety and steady returns. EPF tends to be more stable due to its mandatory nature and contributions from employers.

A provident fund is a government-managed retirement savings scheme used primarily in Asia and Africa. 1 In some ways, these funds resemble a hybrid of 401(k) plans and Social Security in the U.S. They also share some traits with pension funds. Workers give a portion of their salaries to the provident fund.

All employees must contribute until the age of 75 with no minimum age. From the age of 60, only employer contributions are payable. The EPF contribution rates vary according to the employee's age and whether they are a Malaysian/permanent resident.

You need to contact the HR department of each of your former employers and a) find out where your money is; 2) request a withdrawal form if the money is still in the employer's retirement fund; or 3) request the contact details for the administrator who looks after the unclaimed benefit fund if the money has already ...

Here are key points to remember about the EPF Interest Rate: The interest rate of 8.25% is now in effect and applies to EPF deposits. While interest is computed monthly, it is credited to the Employees' Provident Fund account only once a year on March 31st of the respective fiscal year.

Liquidity: Despite the return the risk and tax benefits are one drawback of the Provident Fund is the lack of liquidity with regards to access to these funds. Money that you invest in Provident Fund cannot be withdrawn until you're unemployed for 2 months or until retirement.

Deposits to a PPF account are exempted from the taxation up to a maximum of Rs. 1.5 lakh in a FY under Section 80C of the Income Tax Act, 1961. A Tax saving fixed deposit has a higher interest-earning potential than savings accounts.

EPF Withdrawal Rules 2024

An individual is not permitted to withdraw PF funds, partially or fully, until the time he/she is employed. One can withdraw up to 75% of the funds if he/she is unemployed for at least 1 month and the balance amount if they are unemployed for 2 months or more.

Can I withdraw all my pension? ›

Take cash lump sums

You can take your whole pension pot as cash straight away if you want to, no matter what size it is. You can also take smaller sums as cash whenever you need to. 25% of your total pension pot will be tax-free. You'll pay tax on the rest as if it were income.

Lisa,If you cancel the policy before maturity date (normally in the year you turn 55), the policy will be made "paid-up". You may incur an early termination charge (an accelerated recovery of upfront fees), although the closer you are to maturity date, the lower this should be. Your money will stay invested as before.

For your provident fund payout, the timeline depends on the administrator's efficiency and dedication. Assuming your tax affairs are in order, with 10X you can typically expect a provident fund pay-out within 14 to 21 business days once all necessary documents are in order and contributions are invested.

About Age 55 Withdrawal​

Upon reaching age 55, the contributions made to your Akaun Persaraan and Akaun Sejahtera will be consolidated into Akaun 55. You can withdraw all or part of the savings from this account at any time.

Your EPF membership will continue, as the employer's portion is paid only after age 58. You can however withdraw 90% of your entire EPF amount after the age of 57. As per the norm, the employee contributes 12% of the basic pay plus Dearness Allowance, to the PF account.

Since September 1, 2014, the Government has been providing a minimum pension of ₹1000 per month to pensioners under the Employees' Pension Scheme (EPS), 1995. The EPS, 1995 operates as a 'Defined Contribution-Defined Benefit' Social Security Scheme.

Opening an EPF account compulsory for employees earning a salary of Rs. 15,000 or above, although individuals at any income level can opt for it voluntarily. Employees are required to contribute a minimum of 12% of their salary, with the option to contribute more voluntarily.

No, this is not permitted - you can only withdraw when you leave your employer (on resignation, dismissal, retrenchment).

The “Provident Fund Act” allows the employer to determine employee's contributions rate into the fund between 2% to 15% deducted from employee's monthly salary. Thus, the employer's contribution will depend on the fund scheme set by the employer.

Account details on SMS

UAN activated Members may know their latest PF contribution and balance available with EPFO by sending an SMS at 7738299899 from registered mobile number. EPFOHO UAN to 7738299899.