EPF - Employee Provident Fund

Indian Government renewed the Employee Provident Fund Ordinance Scheme, 1951 by branding it as the Employees' Provident Fund (EPF) Scheme, 1952. It is now renamed as The Employees' Provident Fund and Miscellaneous Act, 1952.

The government, employers and the employees are the members of the central board of trustees who look after the administration of this Act. Employees' Provident Fund Organization (EPFO) along with Ministry of Labor and Employment backs the board of trustees.

EPF Contributions

• An employee's EPF account is set up with he himself and the employer contributing a fixed amount monthly.
• Employee's pay grade and DA.

Funds under EPF Schemes

EPF is one of the best forms of long-term retirement savings as the interest earned and the amount withdrawn both are tax-free. Not only retirements, but EPF account is also used in cases such as if an employee resigns from the organization or if an employee gets deceased or if the employee requires medical treatment.

EPFO is one of the largest organizations all over the world with more than five crore members linked with it along with the number of transactions associated with it.

EPFO operates under three schemes:

• Employees' Deposit Linked Insurance Scheme, 1976
• The Employees' Family Pension Scheme, 1971 was reassigned to Employees' Pension Scheme, 1995.
• Employees' Provident Fund Scheme, 1952.

The contributions from various organizations are made at 12%, but for some of the organizations, it is only 10% because

• Only 10% of contributions are made by the organization possessing 20 or less than 20 employees.
• Employees working in manufacturing plants and industries are not accounted as these organizations are identified as Board of Industrial and Financial Reconstruction (BIFR).
• Organizations which are under loss and can't even make up to their net-worth.
• Factories and manufacturing plants of Bricks, Guar Gum, Jute, coir and Beedi are also not accounted.