EPF: Employees' Provident Fund in India
EPF (Employees' Provident Fund) is a mandatory retirement savings scheme for salaried employees in India, governed by the Employees' Provident Funds and Miscellaneous Provisions Act 1952 and managed by the Employees' Provident Fund Organisation (EPFO).
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.
Interest rate is declared annually by EPFO Central Board of Trustees. Recent rates: 8.25% (FY 2024-25), 8.15% (FY 2023-24), 8.10% (FY 2022-23). Interest is credited annually but compounds monthly on the running balance. EEE tax treatment when held > 5 years: contributions deductible under 80C, interest tax-free, withdrawal tax-free.
Withdrawal: full withdrawal allowed on retirement (58+), 2 months unemployment, or specific events (marriage, education, home purchase, medical emergency — partial). Early withdrawal before 5 years is taxable as income + reverses the 80C benefit. UAN (Universal Account Number) tracks EPF across employers since 2014. Online claim via EPFO Member Portal or UMANG app.
Richify Tip
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.
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