Everything You Need to Know About EPF (Employees’ Provident Fund)

Introduction

Employees’ Provident Fund (EPF) is one of the most popular and significant social security schemes for salaried employees in India. Managed by the Employees’ Provident Fund Organisation (EPFO), it ensures that employees build a financial cushion for their retirement, emergency needs, or long-term goals.

This article will explain what EPF is, its benefits, eligibility, contributions, withdrawal rules, tax implications, and much more — everything you need to understand this important savings instrument.

What is EPF?

The Employees’ Provident Fund (EPF) is a retirement benefits scheme governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

Both the employee and employer contribute a specific percentage of the employee’s salary towards the fund every month. Over time, the accumulated corpus (with interest) becomes a sizable amount available to the employee at retirement or upon leaving the job.

It serves as a forced savings mechanism, encouraging employees to save and invest in their future systematically.

Objectives of EPF

✅ To ensure financial security and independence for employees after retirement.
✅ To assist employees during emergencies by allowing partial withdrawals.
✅ To provide a steady return with minimal risk since it is backed by the Government of India.

Who is Eligible for EPF?

✔ Any employee working in an establishment employing 20 or more people is mandatorily covered under EPF.
✔ Employees earning a basic salary of up to ₹15,000/month must contribute.
✔ Employees earning more than ₹15,000/month can voluntarily become members with employer’s consent.
✔ Employees of both public and private sectors can avail of the benefits.

How Does EPF Work?

Contributions

Both employee and employer contribute to the EPF account every month.
Here’s the breakdown:

Employee’s contribution: 12% of basic salary + dearness allowance.
Employer’s contribution: 12% of basic + DA (but only 3.67% goes to EPF, and 8.33% goes to EPS - Employees’ Pension Scheme).

Example:

If your basic salary + DA is ₹20,000/month:

Employee contributes = ₹2,400 (12%)
Employer contributes = ₹2,400
- Out of this, ₹1,833 goes to EPS & ₹567 to EPF.

Interest Rate

EPF earns an interest rate decided by the government every year. For FY 2024-25, it’s approximately 8.25%.
The interest earned is tax-free (with conditions) and gets compounded annually.

EPF Components

EPF account is divided into three parts:

EPF (Provident Fund)
- Employee’s 12% + employer’s 3.67% contributions accumulate here.
EPS (Pension)
- Employer’s 8.33% contribution goes here.
EDLI (Employees’ Deposit Linked Insurance)
- Offers life insurance cover (paid by employer at no cost to employee).

Benefits of EPF

1. Retirement Savings

A disciplined way to build a retirement corpus with employer’s contribution & government-backed interest.

2. Tax Benefits

Contributions are eligible under Section 80C of Income Tax Act.
Interest & maturity amount are tax-free if withdrawn after 5 years of continuous service.

3. Insurance Cover

Through EDLI, employees automatically get insurance coverage (up to ₹7 lakhs).

4. Emergency Support

Partial withdrawals allowed for medical emergencies, house purchase, marriage, education, etc.

5. Safe & Secure

The fund is managed by EPFO, backed by the Government of India — making it risk-free.

How to Check EPF Balance?

You can check your EPF balance online through:
✅ UMANG App
✅ EPFO Portal (https://www.epfindia.gov.in)
✅ By sending SMS: Type EPFOHO UAN <LANGUAGE CODE> to 7738299899
✅ Missed call on 011-22901406 from registered mobile.

UAN: Universal Account Number

The Universal Account Number (UAN) is a unique number assigned to each employee, which remains the same throughout their career, even if they change jobs.

All your EPF accounts (from different employers) get linked to your UAN.
With UAN, employees can:
✅ Transfer funds easily between employers
✅ Track contributions
✅ Update KYC
✅ Withdraw funds online

EPF Withdrawal Rules

Employees can withdraw EPF funds fully or partially, based on conditions.

When Can You Fully Withdraw?

On retirement (after 58 years of age).
If unemployed for more than 2 months.

Partial Withdrawals Allowed For:

✅ Medical emergencies
✅ Marriage of self/children/siblings
✅ Education expenses
✅ Home loan repayment or house purchase

Tax on Withdrawal

If withdrawn before 5 years of continuous service, TDS applies.
After 5 years, withdrawal is tax-free.

EPF Transfer When Changing Jobs

When you switch jobs, instead of withdrawing, you can transfer your EPF balance to your new employer’s EPF account.
✅ Submit Form-13 online or offline through your UAN account.
✅ Ensure previous employer updates Date of Exit (DOE) to avoid issues.

EPF and EPS Pension

Apart from EPF, you also build a pension corpus through EPS.

Minimum 10 years of service required to be eligible for pension.
Pension starts at retirement age of 58.
Monthly pension depends on your last drawn salary & years of service.

EPF Tax Benefits

At the time of contribution:

✅ Employee’s contribution qualifies for deduction under Section 80C (up to ₹1.5 lakh/year).

Interest earned:

✅ Tax-free as long as it meets conditions.

Maturity amount:

✅ Tax-free if withdrawn after 5 years of service.

Common EPF Problems & Solutions

1. UAN Not Activated or Linked

✅ Solution: Activate UAN at EPFO portal & link KYC.

2. DOE (Date of Exit) Not Updated

✅ Solution: Contact previous employer or update through your UAN if allowed.

3. Name/DOB Mismatch

✅ Solution: Correct KYC details through EPFO portal.

4. Claim Rejected

✅ Solution: Check reason, rectify error & reapply.

EPF and Digital India

EPF has become easier to manage thanks to digital initiatives:
✅ Online withdrawal & transfer
✅ Real-time balance checking
✅ SMS & email alerts
✅ UMANG App for mobile access

These features reduce dependency on employers & make EPF more transparent.

Myths About EPF

Myth 1: EPF is Only for Retirement

While it is designed for retirement, you can use it for emergencies & milestones too.

Myth 2: EPF is Complicated

With UAN & online services, it has become simple to manage.

Myth 3: You Can’t Withdraw Before Retirement

Partial withdrawals are allowed under specific circumstances.

EPF vs. PPF (Public Provident Fund)

Feature	EPF	PPF
Who can invest?	Only salaried employees	Anyone
Employer Contribution?	Yes	No
Lock-in Period	Till retirement	15 years
Interest Rate	~8.25%	~7.1%
Tax Benefits	EEE	EEE

Tips to Maximize Your EPF Benefits

✔ Check your contributions & interest regularly through UAN portal.
✔ Transfer instead of withdrawing when changing jobs.
✔ Update KYC details to avoid claim rejection.
✔ Don’t withdraw unless it’s an emergency — let your savings grow.
✔ Utilize partial withdrawals for planned needs like home purchase or education.

How We Can Help You

At S.H Solutions, we specialize in helping employees with:

✅ EPF withdrawal (full or partial)
✅ Transfer of EPF (Form-13)
✅ Updating DOE, correcting KYC & resolving mismatches
✅ Tracking & claiming pending applications
✅ Understanding and maximizing your benefits

We make the process hassle-free & quick for you!

📞 Call/WhatsApp: 7003157671
📩 Email: shsolutions06@gmail.com

Your hard-earned money deserves to work for you — let us assist you today.

Conclusion

EPF is not just another deduction from your salary — it is your hard-earned savings & future security. It helps you save systematically, earn safe returns, and ensures financial stability when you need it most — be it at retirement, in emergencies, or for big life goals.

Make sure you understand its rules, benefits & processes to get the most out of it. With the right guidance and planning, your EPF can truly be your best financial ally.