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Home Personal Finance PF Account Benefits: Important news! Many facilities are available on PF account...
  • Personal Finance

PF Account Benefits: Important news! Many facilities are available on PF account including free insurance of 7 lakhs, know here details

By
Pravesh Maurya
-
June 17, 2022
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    PF Withdrawal New Rule: Good news for EPFO members! Now only 20% TDS will be deducted on PF withdrawal in this cases, know the new rules
    PF Withdrawal New Rule: Good news for EPFO members! Now only 20% TDS will be deducted on PF withdrawal in this cases, know the new rules
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    EPFO PF Account Benefits: Subscribers get free insurance up to Rs 7 lakh under the Employees Deposit Linked Insurance (EDLI) scheme as soon as the PF account is opened. The purpose of this scheme is to provide financial security to the family member after the death of the PF account holder. Earlier this amount of insurance was Rs 6 lakh.


    new Delhi. The Employees’ Provident Fund Organization (EPFO) has cut the interest rate on EPF deposits by 0.4 percent to 8.1 percent for 2021-22. Even after this deduction, the interest earned on investment in PF account is higher than other savings schemes. The special thing is that the account holders get many facilities on contribution to the PF account.

    Investment advisor Balwant Jain says that even though the government has given a shock to the shareholders (account holders) before Holi by reducing the interest rate on PF deposits, but it is still beneficial in many ways. The special thing is that the subscribers get free insurance up to Rs 7 lakh under the Employees Deposit Linked Insurance (EDLI) scheme as soon as the PF account is opened. The purpose of this scheme is to provide financial security to the family member after the death of the PF account holder. Earlier this amount of insurance was Rs 6 lakh.

    Interest on closed accounts

    PF account holders also get interest on closed accounts. You will continue to earn interest even if your PF account is inactive for more than three years. This change has been done by EPFO ​​in 2016. Prior to this, interest is not available if the PF account is inactive for three years.

    Pension after retirement

    A PF account holder becomes entitled to pension after the age of 58 years. For this, it is necessary to contribute every month in the PF account for at least 15 years. Under EPFO ​​rules, 12 percent of DA along with the basic salary of the employee goes to the PF account. The company also contributes the same. Of this, 3.67 percent goes to the PF account of the employee, while 8.33 percent goes to the pension scheme.

    Get loan easily

    In case of emergency, the account holder can take a loan against the amount deposited in his PF account. On this, he has to pay one percent more interest than the interest received on the PF deposit. This loan is for three years. Apart from this, 90 percent of the amount deposited in the PF account can be withdrawn for home loan repayment. It can also be used to buy land.

    Can withdraw in between

    You can withdraw money from your PF account in case of emergency. If the employee has served in a company for five years, then no tax is levied on the withdrawal from the PF account. Otherwise 10 percent TDS and tax is deducted.

    Helpful in saving tax

    You can also save tax on investment in PF. Contribution up to Rs 1.50 lakh annually to your PF account in the old tax slabIncome TaxYou can get tax exemption under section 80C of the Act. This facility is not available in the new slab.

    Better investment option despite the deduction

    Adil Shetty, CEO of BankBazaar.com, says that despite the interest rate cut, investing in PF account is a better option. The interest available on this is still higher than other schemes like Sukanya Samriddhi Yojana, Kisan Vikas Patra, NSC, Fixed Deposit etc. The revised rate is still one per cent higher than the interest rate of 7.1 per cent on PPF.

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    DISCLAIMER

    We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at businessleaguein@gmail.com
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      Pravesh Maurya
      Pravesh Maurya, has 5 years of experience in writing Finance Content, Entertainment news, Cricket and more. He has done BA in English. He loves to Play Sports and read books in free time. In case of any complain or feedback, please contact me @ businessleaguein@gmail.com

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