What is EPF & how to check EPF balance?
If you are a salaried individual in India, it is likely that you have heard of the Employees' Provident Fund (EPF). The EPF is a savings scheme for employees that is managed by the Employees' Provident Fund Organisation (EPFO), a statutory body under the Ministry of Labour and Employment, Government of India. In this blog, we will discuss what the EPF is, its benefits, and how you can check your EPF balance.
What is EPF?
The EPF is a savings scheme that allows salaried individuals to save a part of their income every month towards their retirement. Both the employee and the employer contribute to the EPF account. The employee's contribution is 12% of their basic salary plus dearness allowance, and the employer contributes an equal amount.
The EPF account also earns interest, which is fixed by the government every year. The current EPF interest rate for the financial year 2021-22 is 8.5%.
Benefits of EPF
One of the main benefits of the EPF is that it is a long-term savings scheme that helps individuals build a corpus for their retirement. In addition to this, there are several other benefits of the EPF:
Tax benefits: Contributions to the EPF account are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. The interest earned on the EPF account is also tax-free.
Loan facility: EPF account holders can avail of a loan against their EPF balance. The loan amount can be up to 75% of the total EPF balance.
PF withdrawal: EPF account holders can withdraw their balance in certain circumstances, such as at the time of retirement, resignation, or in case of a medical emergency.
How to Check EPF Balance?
It is important to keep track of your EPF balance to ensure that your contributions are being credited correctly and to plan for your retirement. Here are some ways in which you can check your EPF balance:
EPFO Portal: You can check your EPF balance by visiting the EPFO website and logging in using your Universal Account Number (UAN) and password. Once you have logged in, you can view your EPF balance, download your EPF passbook, and check the status of any EPF claims you may have submitted.
SMS: You can also check your EPF balance by sending an SMS to 7738299899. The message should be in the format EPFOHO UAN ENG. The last three letters in the message should be the first three letters of the language you want to receive the message in, for example, for English, it should be ENG.
Missed Call: Another way to check your EPF balance is to give a missed call to 011-22901406 from your registered mobile number. You will receive an SMS with your EPF balance details.
Mobile App: The EPFO also has a mobile app that you can download on your smartphone. You can log in using your UAN and password and view your EPF balance, download your EPF passbook, and track the status of your EPF claims.
EPF account holders can withdraw their balance in certain circumstances, such as at the time of retirement, resignation, or in case of a medical emergency. Here is how you can withdraw your EPF balance:
Online: EPF account holders can submit their withdrawal claims online on the EPFO website. You will need to log in using your UAN and password, and select the type of claim you want to submit. You will also need to provide your bank details and upload a scanned copy of your cancelled cheque.
Offline: If you prefer to submit your withdrawal claim offline, you can do so by filling out the EPF withdrawal form and submitting it to the EPFO office. You can download the form from the EPFO website or collect it from the EPFO office. You will need to fill out your personal details, bank account details, and the reason for withdrawal.
It is important to note that withdrawing your EPF balance before the completion of five years of continuous service will attract tax. If you withdraw your EPF balance before completing five years of service, the amount withdrawn will be added to your taxable income for the financial year and taxed accordingly. Therefore, it is advisable to keep your EPF balance invested for the long term and withdraw it only when necessary.
EPF Interest Rate
The EPF interest rate is fixed by the government every year. The current EPF interest rate for the financial year 2021-22 is 8.5%. The interest is calculated on the monthly running balance of the EPF account and credited at the end of the financial year. The interest earned on the EPF account is tax-free, which makes it an attractive savings scheme for individuals looking to build a corpus for their retirement.
Member of Employees Provident Fund
To become a member of the Employees Provident Fund, you need to fulfill certain eligibility criteria. You should be a salaried employee working in an organization that is registered under the EPFO. Your employer should deduct EPF contributions from your salary and credit it to your EPF account every month. You will also need to have a UAN, which is a unique number assigned to every EPF account holder. Your UAN is linked to your EPF account and helps you track your EPF balance and submit EPF claims.
In conclusion, the EPF is an important savings scheme for salaried individuals in India. It allows individuals to save a part of their income every month towards their retirement and earn tax-free interest on their savings. It is important to keep track of your EPF balance and withdraw it only when necessary to avoid tax implications. By following the steps outlined in this blog, you can check your EPF balance and submit EPF claims online or offline.