EPFO- Employees’ Provident Fund Organization provides PF facility to all the employees working in the country. For this, a small part of the salary of the employee is deducted for depositing in the PF account.
New Delhi. Employees’ Provident Fund Organization (EPFO) provides PF facility to all employees. For this, a small part of the employee’s salary is deducted to be deposited in the PF account. This is a way of securing the future of the employee after his retirement.
Let us tell you that PF is the account of any employed person in which he himself and his employer deposit a certain amount (via employer) in a fixed account opened in your name in EPFO. In this, your employer deducts a certain amount from your salary (12 percent at present) and deposits it in the PF office. This fixed amount is fixed by the government and in this fixed amount the employer also deposits his share (part of our CTC) by adding it. So let’s know everything about them…
1. The facility of free insurance is available
as soon as an employee’s PF account is opened, then he also becomes insured by default. Under the Employee Deposit Linked Insurance (IDLI scheme), the employee is insured up to Rs 6 lakh. In case of death of an active member of EPFO during the period of service, his nominee or legal heir is paid up to Rs.6 lakh. Companies and the central government provide this benefit to their employees.
2. Tax exemption is available
On the other hand, even if you want tax exemption, PF is the best option. However, you should also know that there is no such facility in the new tax system whereas tax exemption is available in the old tax system. EPF account holders can save up to 12 percent in tax on their salary under Section 80C of Income Tax.
3. Pension is available after retirement
If you maintain PF account continuously for 10 years, you will get the benefit of lifetime employee pension scheme. That is, staying in such a job (jobs) continuously for 10 years from where money has been deposited in your PF account, you will continue to get a pension of one thousand rupees after retirement under the Employees’ Pension Scheme 1995.
4. Interest on Dormant Account
Interest is also paid on the inactive PF account of the employees. According to the changes made in the law in 2016, now interest is also paid to PF account holders on the amount deposited in their PF account lying dormant for more than three years. Earlier, there was no provision to pay interest on PF account lying dormant for three years.
5. Auto Transfer Facility
You can link more than one PF account (if you have been changing jobs) through your UAN number linked with Aadhaar. Transferring PF money on changing jobs has become easy now. No need to fill separate Form-13 to claim EPF money on joining a new job. Now it will happen automatically. EPFO has introduced a new form, Form 11 which will be used in place of Form 13. This will be used in all cases of auto transfer.
6. Can withdraw money at the time of need
Another great feature of PF fund is that some money can also be withdrawn from it at the time of need. This will save you from the possibilities of loans.
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