[Audio] EPF
Dr.Rajesh Kamath
Assistant Professor – senior scale
PSPH
Manipal Academy of Higher Education. 

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Dr.Rajesh Kamath
Assistant Professor – senior scale
PSPH
Manipal Academy of Higher Education

[Audio] Employee’s Provident Fund (EPF) is a retirement benefit scheme that’s available to all salaried employees. This fund is maintained and overseen by the Employees Provident Fund Organisation of India (EPFO) and any company with over 20 employees is required by law to register with the EPFO.
It’s a savings platform that helps employees save a fraction of their salary every month that can be used in the event that you are rendered unable to work, or upon retirement.. 

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Employee’s Provident Fund (EPF) is a retirement benefit scheme that’s available to all salaried employees. 
This fund is maintained and overseen by the Employees Provident Fund Organisation of India (EPFO) and any company with over 20 employees is required by law to register with the EPFO.
It’s a savings platform that helps employees save a fraction of their salary every month that can be used in the event that you are rendered unable to work, or upon retirement.

[Audio] Till September 1st, 2014, everybody earning less than 6500 was compulsorily covered under this EPF.
After September 1st, 2014, the threshold now is 15,000.. 

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Till September 1st, 2014, everybody earning less than 6500 was compulsorily covered under this EPF.
After September 1st, 2014, the threshold now is 15,000.

[Audio] 12% of what?
Courts have held that any allowance which is ordinarily, necessarily and uniformly paid to all employees forms a part of the basic wages.
In this context, it is relevant to note that the obligation under the EPF Act is to make a contribution of 12% on the basic wages, dearness allowance and retaining allowance.. 

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12% of what?
Courts have held that any allowance which is ordinarily, necessarily and uniformly paid to all employees forms a part of the basic wages.
In this context, it is relevant to note that the obligation under the EPF Act is to make a contribution of 12% on the basic wages, dearness allowance and retaining allowance.

[Audio] EPF,EPS,EDLIS
Employee Provident Fund (EPF) : Employee’s contribution is matched by Employer’s contribution(till 12%). The employer contribution is exempt from tax and employee’s contribution is taxable but eligible for deduction under section 80C of Income tax Act. The EPF amount earns interest as declared by Government.
The current rate of interest is 8.65%.. 

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Employee Provident Fund (EPF) : Employee’s contribution is matched by Employer’s contribution(till 12%). 
The employer contribution is exempt from tax and employee’s contribution is taxable but eligible for deduction under section 80C of Income tax Act. 
The EPF amount earns interest as declared by Government.
The current rate of interest is 8.65%.

[Audio] EDLIS
EDLI or Employees Deposit Linked Insurance Scheme provides a lump sum payment to the insured’s nominated beneficiary in the event of death due to natural causes, illness or accident. All employers to whom the Employee’s Provident Fund and Miscellaneous Provision Act, 1952 applies, have a Statutory liability to subscribe to EDLI to provide for the benefit of Life insurance to all their employees.
EPFO has an active subscriber base of more than 45 million and it directly manages a corpus of more than Rs 6 lakh crore.. 

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EDLI or Employees Deposit Linked Insurance Scheme provides a lump sum payment to the insured’s nominated beneficiary in the event of death due to natural causes, illness or accident. 
All employers to whom the Employee’s Provident Fund and Miscellaneous Provision Act, 1952 applies, have a Statutory liability to subscribe to EDLI to provide for the benefit of Life insurance to all their employees.
EPFO has an active subscriber base of more than 45 million and it directly manages a corpus of more than Rs 6 lakh crore.

[Audio] EDLIS
Additionally, more than Rs 2 trillion is managed by exempted establishments or organisations that manage their PF money under EPFO’s overarching guidance.
2 trillion rupees is how many crore rupees?
2 lakh crores?
Employee Deposit linked insurance scheme is a comprehensive group term insurance.. 

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Additionally, more than Rs 2 trillion is managed by exempted establishments or organisations that manage their PF money under EPFO’s overarching guidance.
2 trillion rupees is how many crore rupees?
2 lakh crores?
Employee Deposit linked insurance scheme is a comprehensive group term insurance.

[Audio] Every employee who is a member of Provident fund gets covered under EDLI.
The coverage is for 24 hours.
Employee can be anywhere. Being at the workplace is not necessary.
It covers the death of employee irrespective of the cause. There are no exclusions under this policy.
The coverage and premium is same for every employee irrespective of Age or gender or other factor.
The insurance coverage is linked to the pay of the employee, basic + dearness allowance, with the upper limit of Rs 15,000.
There is no minimum limit of service to avail the EDLI benefit.. 

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Every employee who is a member of Provident fund gets covered under EDLI.
The coverage is for 24 hours.
Employee can be anywhere. Being at the workplace is not necessary.
It covers the death of employee irrespective of the cause. There are no exclusions under this policy.
The coverage and premium is same for every employee irrespective of Age or gender or other factor.
The insurance coverage is linked to the pay of the employee, basic + dearness allowance, with the upper limit of Rs 15,000.
There is no minimum limit of service to avail the EDLI benefit.

[Audio] EDLIS
Maximum amount assured : Rs. 6 lakhs.
Claim amount : 30 times the salary. Salary here means Basic + D.A.
The upper limit of wage for the EDLI is Rs 15,000. Along with this, the bonus of Rs 1.5 lakh is also given.
Thus, the maximum EDLI claim amount would be Rs 6 lakh (30 x15,000) + 1,50,000
The condition of continuous employment of one year under current employer before being eligible for insurance benefits has been removed.. 

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Maximum amount assured : Rs. 6 lakhs.
Claim amount : 30 times the salary. Salary here means Basic + D.A.
The upper limit of wage for the EDLI is Rs 15,000. 
Along with this, the bonus of Rs 1.5 lakh is also given.
Thus, the maximum EDLI claim amount would be Rs 6 lakh (30 x15,000) + 1,50,000
The condition of continuous employment of one year under current employer before being eligible for insurance benefits has been removed.

[Audio] Alternatives to EDLI
The purpose of the Employee Deposit linked scheme is to give term insurance cover to every employee. Therefore, if an employer gives term insurance cover to all of its employees, it is not required to contribute to the EDLI.
The employer, if it so wishes, can opt for group term insurance scheme in lieu of EDLI. There is one condition with this relaxation : The benefit of such group term insurance scheme should be equal to or better than the EDLI. The EPFO itself approves the group term insurance scheme in lieu of EDLI.. 

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The purpose of the Employee Deposit linked scheme is to give term insurance cover to every employee. 
Therefore, if an employer gives term insurance cover to all of its employees, it is not required to contribute to the EDLI.
The employer, if it so wishes, can opt for group term insurance scheme in lieu of EDLI. 
There is one condition with this relaxation : The benefit of such group term insurance scheme should be equal to or better than the EDLI. 
The EPFO itself approves the group term insurance scheme in lieu of EDLI.

[Audio] EPS
12% contribution from the employee’s side goes to EPF,…
…but out of the 12% contribution that the employer makes, 8.33% goes to the EPS (subject to a maximum of Rs 1250) and the rest goes into the EPF. This EPS portion does not earn any interest.
The fraction of service for six months or more shall be treated as one year and the service less than six months shall be ignored. So 9 years and 6 months will be rounded upto 10 years.
Lifelong pension is available to the member. Upon his/her death, the family is entitled to the pension.. 

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12% contribution from the employee’s side goes to EPF,…
…but out of the 12% contribution that the employer makes, 8.33% goes to the EPS (subject to a maximum of Rs 1250) and the rest goes into the EPF. 
This EPS portion does not earn any interest.
The fraction of service for six months or more shall be treated as one year and the service less than six months shall be ignored. So 9 years and 6 months will be rounded upto 10 years.
Lifelong pension is available to the member. Upon his/her death, the family is entitled to the  pension.

[Audio] EPS
An employee can start receiving the pension under EPS only after rendering a minimum service of 10 years and attaining the age of 58/50 years.
No pension is payable before the age of 50 years.
Early pension can be claimed after 50 years but before the age of 58 years. But it is subject to discounting factor @ 4% for every year falling short of 58 years. In case of death / disablement, the above restrictions don’t apply.
Maximum Pension amount is Rs 7,500 per month.
Minimum Pension amount is Rs 1,000 per month.
Maximum service for the calculation of service is 35 years.. 

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An employee can start receiving the pension under EPS only after rendering a minimum service of 10 years and attaining the age of 58/50 years.
No pension is payable before the age of 50 years.
Early pension can be claimed after 50 years but before the age of 58 years. But it is subject to discounting factor @ 4% for every year falling short of 58 years. In case of death / disablement, the above restrictions don’t apply.
Maximum Pension amount is Rs 7,500  per month.
Minimum Pension amount is Rs 1,000 per month.
Maximum service for the calculation of service is 35 years.

[Audio] EPS EPS Pension = Average Salary X Number of Years Service 70
The Average Salary here means pensionable salary in the scheme.
Pensionable Salary is restricted to Rs 15,000 per year.
It is arrived at by considering the average contributing salary for the 60 months preceding the date of exit.. 

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EPS Pension = Average Salary   X  Number of Years Service 
                                                     70
The Average Salary here means pensionable salary in the scheme.
Pensionable Salary is restricted to Rs 15,000 per year.
It is arrived at by considering the average contributing salary for the 60 months preceding the date of exit.

[Audio] a CONTRIBUTION ACCOUNTS ADMINISTRATION ACCOUNTS EPF EPS EDLI EPF EDLI TOTAL Employee 12 0 0 0 0 12 Employer 3.67 8.33(max. 1250) 0.5 (max.15,000) 1.10 0.01 13.61 Total 15.67 8.33 0.5 1.10 0.01 25.61. 

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CONTRIBUTION ACCOUNTS

   ADMINISTRATION ACCOUNTS


 EPF EPS EDLI EPF EDLI TOTAL Employee 12 0 0 0 0 12 Employer 3.67 8.33(max. 1250) 0.5 (max.15,000) 1.10 0.01 13.61 Total 15.67 8.33 0.5 1.10 0.01 25.61

[Audio] As per PF withdrawal rules, a salaried employee can withdraw a provident fund account on two counts; first, if he or she has no job and second, if two months have elapsed since his or her last employment (not attached to any organization or unemployed for 2 months). Nevertheless, there are cases wherein employees - assuming a cumbersome claims process- may withdraw their EPF account at the time of leaving an organisation.
However, apart from the legal angle, experts do not recommend following the aforementioned practice from the perspective of financial management as well in that a salaried employee cannot avail of several benefits of maintaining a provident fund account including tax-free interest, annual compounding and compulsory long-term savings among others.. 

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As per PF withdrawal rules, a salaried employee can withdraw a provident fund account on two counts; first, if he or she has no job and second, if two months have elapsed since his or her last employment (not attached to any organization or unemployed for 2 months). 
Nevertheless, there are cases wherein employees - assuming a cumbersome claims process- may withdraw their EPF account at the time of leaving an organisation.
However, apart from the legal angle, experts do not recommend following the aforementioned practice from the perspective of financial management as well in that a salaried employee cannot avail of several benefits of maintaining a provident fund account including tax-free interest, annual compounding and compulsory long-term savings among others.

[Audio] Experts, therefore, advice employees to instead transfer the EPF balance in their previous employer’s account into the account of their current employer. However, the government of India’s Unique Account Number or UAN simplifies the procedure (management and transfer) given that it is allotted to all salaried employees and will not change throughout their careers. Salaried employees will, therefore, not be provided a new account number when they hop jobs or companies.. 

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Experts, therefore, advice employees to instead transfer the EPF balance in their previous employer’s account into the account of their current employer. 
However, the government of India’s Unique Account Number or UAN simplifies the procedure (management and transfer) given that it is allotted to all salaried employees and will not change throughout their careers. 
Salaried employees will, therefore, not be provided a new account number when they hop jobs or companies.

[Audio] List of Purposes Minimum Service PF Withdrawal Limits Relations Marriage 7 years 50% Self, siblings and children Construction/Purchase of plot 5 years 24 times the salary His or her name, spouse or be held jointly Home Loan Repayment 10 years 36 times of the salary His or her name, spouse or be held jointly House renovation/alteration 5 years 12 times of the salary His or her name, spouse or be held jointly Retirement 54 years 90% Self Medical treatment Nil 6 times of his or her monthly salary or total corpus Self, Parents, Spouse and children.. 

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List of Purposes
 Minimum Service
 PF Withdrawal Limits
 Relations
 Marriage
 7 years
 50%
 Self, siblings and children
 Construction/Purchase of plot
 5 years
 24 times the salary
 His or her name, spouse or be held jointly
 Home Loan Repayment
 10 years
 36 times of the salary His or her name, spouse or be held jointly House renovation/alteration
 5 years
 12 times of the salary His or her name, spouse or be held jointly
 Retirement
 54 years
 90%
 Self
 Medical treatment
 Nil 6 times of his or her monthly salary or total corpus
 Self, Parents, Spouse and children.

[Audio] References
1. https://www.bankbazaar.com/tax/all-about-epf.html
2. https://www.employmentlawalliance.com/firms/trilegal/articles/wage-ceiling-under-epf-act-increased-to-inr-15-000
3. https://www.planmoneytax.com/edli-employee-deposit-linked-insurance-scheme/
4. https://www.bemoneyaware.com/blog/eps/
5. https://www.bankbazaar.com/saving-schemes/pf-withdrawal-rules.html. 

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1. https://www.bankbazaar.com/tax/all-about-epf.html
2. https://www.employmentlawalliance.com/firms/trilegal/articles/wage-ceiling-under-epf-act-increased-to-inr-15-000
3. https://www.planmoneytax.com/edli-employee-deposit-linked-insurance-scheme/
4. https://www.bemoneyaware.com/blog/eps/
5. https://www.bankbazaar.com/saving-schemes/pf-withdrawal-rules.html

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EPF Act_latest

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EPF
Dr Rajesh Kamath
Assistant Professor – senior scale
PSPH
Manipal Academy of Higher Education

avatar

EPF,EPS,EDLIS
Employee Provident Fund (EPF) : Employee’s contribution is matched by Employer’s contribution(till 12%). 
The employer contribution is exempt from tax and employee’s contribution is taxable but eligible for deduction under section 80C of Income tax Act. 
The EPF amount earns interest as declared by Government.
The current rate of interest is 8.65%.

EDLIS
EDLI or Employees Deposit Linked Insurance Scheme provides a lump sum payment to the insured’s nominated beneficiary in the event of death due to natural causes, illness or accident. 
All employers to whom the Employee’s Provident Fund and Miscellaneous Provision Act, 1952 applies, have a Statutory liability to subscribe to EDLI to provide for the benefit of Life insurance to all their employees.
EPFO has an active subscriber base of more than 45 million and it directly manages a corpus of more than Rs 6 lakh crore.

EDLIS
Additionally, more than Rs 2 trillion is managed by exempted establishments or organisations that manage their PF money under EPFO’s overarching guidance.
2 trillion rupees is how many crore rupees?
2 lakh crores?
Employee Deposit linked insurance scheme is a comprehensive group term insurance.

EDLIS
Maximum amount assured : Rs. 6 lakhs.
Claim amount : 30 times the salary. Salary here means Basic + D A 
The upper limit of wage for the EDLI is Rs 15,000. 
Along with this, the bonus of Rs 1.5 lakh is also given.
Thus, the maximum EDLI claim amount would be Rs 6 lakh (30 x15,000) + 1,50,000
The condition of continuous employment of one year under current employer before being eligible for insurance benefits has been removed.

Alternatives to EDLI
The purpose of the Employee Deposit linked scheme is to give term insurance cover to every employee. 
Therefore, if an employer gives term insurance cover to all of its employees, it is not required to contribute to the EDLI.
The employer, if it so wishes, can opt for group term insurance scheme in lieu of EDLI. 
There is one condition with this relaxation : The benefit of such group term insurance scheme should be equal to or better than the EDLI. 
The EPFO itself approves the group term insurance scheme in lieu of EDLI.

EPS
12% contribution from the employee’s side goes to EPF,…
…but out of the 12% contribution that the employer makes, 8.33% goes to the EPS (subject to a maximum of Rs 1250) and the rest goes into the EPF. 
This EPS portion does not earn any interest.
The fraction of service for six months or more shall be treated as one year and the service less than six months shall be ignored. So 9 years and 6 months will be rounded upto 10 years.
Lifelong pension is available to the member. Upon his/her death, the family is entitled to the  pension.

EPS
An employee can start receiving the pension under EPS only after rendering a minimum service of 10 years and attaining the age of 58/50 years.
No pension is payable before the age of 50 years.
Early pension can be claimed after 50 years but before the age of 58 years. But it is subject to discounting factor @ 4% for every year falling short of 58 years. In case of death / disablement, the above restrictions don’t apply.
Maximum Pension amount is Rs 7,500  per month.
Minimum Pension amount is Rs 1,000 per month.
Maximum service for the calculation of service is 35 years.

EPS

EPS Pension = Average Salary   X  Number of Years Service 
                                                     70
The Average Salary here means pensionable salary in the scheme.
Pensionable Salary is restricted to Rs 15,000 per year.
It is arrived at by considering the average contributing salary for the 60 months preceding the date of exit.

a

               CONTRIBUTION ACCOUNTS

   ADMINISTRATION ACCOUNTS


 EPF EPS EDLI EPF EDLI TOTAL Employee 12 0 0 0 0 12 Employer 3.67 8.33(max. 1250) 0.5 (max.15,000) 1.10 0.01 13.61 Total 15.67 8.33 0.5 1.10 0.01 25.61

References
1. bankbazaar
2. employmentlawalliance
3. planmoneytax
4. bemoneyaware
5. bankbazaar