EPF 2026: Employees' Provident Fund — Rate, Withdrawal, UAN, Taxation

Contribution structure: employee contributes 12% of basic salary + dearness allowance (DA); employer contributes 12% as well, but the employer share is split — 8.33% goes to Employees' Pension Scheme (EPS) capped at ₹1,250/month (on max ₹15,000 wage), and the remaining 3.67% goes to EPF. Voluntary contribution above 12% is allowed (Voluntary Provident Fund / VPF) up to 100% of basic + DA — same tax treatment as EPF, same interest rate, but no employer match.

Interest rate is declared annually by EPFO Central Board of Trustees. Recent rates: 8.25% (FY 2024-25 — latest declared), 8.15% (FY 2023-24), 8.10% (FY 2022-23), 8.50% (FY 2020-21), 8.65% (FY 2018-19). Interest is credited annually but compounds monthly on the running balance — late-month contributions earn interest only from the following month. EEE tax treatment when held > 5 years: contributions deductible under 80C (old regime, up to ₹1.5L combined cap), interest tax-free, withdrawal tax-free.

Taxation of high EPF balance (Finance Act 2021): interest on EPF + VPF contributions exceeding ₹2.5 lakh per FY (₹5 lakh if the employer does NOT contribute — rare) is taxable at slab rate from FY 2021-22 onwards. Two sub-accounts are maintained in the passbook: the 'non-taxable' portion (up to ₹2.5L contribution per year + its interest) and the 'taxable' portion (excess contribution + its interest). Practically affects only employees with basic+DA above ~₹21 lakh annually or those making large VPF top-ups.

Worked example: Basic + DA of ₹50,000/month. Employee 12% = ₹6,000/month = ₹72,000/year. Employer 3.67% (EPF portion) = ₹1,835/month = ₹22,020/year. Total annual EPF contribution: ₹94,020 + employer's ₹15,000 EPS. At 8.25% compounded for 25 years with 5% annual salary increment, this builds a corpus of roughly ₹1.5-1.8 crore. Use the EPF Calculator at /in/tools/epf-calculator to plug in your specific basic, employer share, and tenure.

Withdrawal scenarios: (1) Full withdrawal on retirement (58+) — tax-free if 5+ years of service. (2) Resignation: 2 months unemployment allowed, then full withdrawal allowed (partial allowed for medical / home / family — see partial-withdrawal rules below). (3) Death of member: nominee receives full corpus plus EDLI insurance (up to ₹7 lakh). (4) Permanent migration abroad: full withdrawal allowed regardless of service. Early withdrawal before 5 years of continuous service is TAXABLE as income (+ reverses the 80C benefit you claimed) — TDS deducted at 10% if PAN furnished, 20%+ if not.

Partial withdrawal scenarios (rules per Para 68 EPF Scheme): (1) House purchase / construction — after 5 years of service, up to 90% of EPF + employer share (provided account holds the amount). (2) Marriage of self / sibling / child — up to 50% of employee share, after 7 years of service, max 3 times in lifetime. (3) Education of self / child — up to 50% of employee share, after 7 years of service. (4) Medical treatment (self or family) — up to 6 months wages + employee share, no service minimum. (5) COVID-19 advance (still available) — 75% of EPF balance OR 3 months wages, whichever is lower, non-refundable.

UAN (Universal Account Number) and KYC: UAN tracks EPF across employers since October 2014 — same UAN follows you across job changes. KYC linking (Aadhaar, PAN, bank) is mandatory for online withdrawal — verify via the EPFO Member Portal or UMANG app. Transferring EPF from previous employer to new: file Form 13 online via Member Portal; takes 7-15 days typically. Without transfer, the old account becomes 'inoperative' after 3 years of no contributions and stops earning interest beyond 3 years post-leaving (rule effective from 2016 — restored partially from 2024).

Interest from FY 2021-22 onwards on contributions exceeding ₹2.5 lakh/year (₹5 lakh if employer doesn't contribute) is taxable — applies mostly to high earners with VPF. Form 15G/15H can be submitted to avoid TDS on PF withdrawals < ₹50,000. Check passbook online via EPFO portal or UMANG app for real-time balance.

Related terms

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