EPF Registration

Employed persons can benefit from a variety of provident fund perks to ensure their futures both during and after retirement. The following are a few of benefits of provident fund amount:

Government developed Employee Pension Scheme and Provident Fund as two crucial components of Employment Provident Fund to provide financial stability to retiring employee. Here, 12% of compensation must be contributed by both the company and the employee. Out of the employer's 12% contribution, 8.33% goes to the employee pension plan, and the remaining amount is transferred to the employee's provident fund. The entire employee contribution is diverted to the employment provident fund.

According to the provisions of Section 80C of the Income Tax Act of 1961, employee provident funds are eligible for a tax exemption. As a result, the employee is exempt from paying taxes on provident fund interest. The current interest rate is about 8%. The provident fund continues to collect interest even if it has been idle for longer than three years.

The money in a provident fund, which is a social security programme, may be taken early. However, in order to protect employees even after retirement, the Employee Provident Fund Organization has placed some restrictions on early withdrawal of the entire provident fund balance. However, an employee may withdraw a portion of their provident fund in the event of an emergency, such as a medical emergency, marriage-related necessity, or educational need.