A complete guide on PF account

The employment provident fund (EPF) or provident fund (PF) is considered one of the best investment schemes introduced by the EPFO or the Employment Provident Fund Organization of India. This PF is the organ of the labour and employment ministry of the government of India. It depicts that any organization with 20 or more permanent employees must register with the EPFO.

Don’t know what exactly a PF is? Here is a clear and concise idea for you. Employment provident is the retirement benefits scheme, and as a fact of the matter, any permanent employee can join an EPF. The scheme creates a merged pf account for the employer and the employee, and both of them will have to contribute at least 12% of the basic salary.

So, when do these deposits need to be made? Well, it needs to be made every month. This is how employees stash a part away of their salary every month, thereby making sure they have enough savings once they retire. Remember, Under Section 80C, EPF is eligible for only tax benefits, and the best part, both the interest gained and the returns are all tax-free.

Now, in this article, you will get to know all about PF or EPF and enhance your knowledge regarding it.

So, let’s get started, shall we?

What are the Eligibility Criteria for EPF? 

Under this plan, an employee can easily turn into a functioning individual from the plan and get the best benefits out of this.

Usually, employees of any organization, especially permanent employees, are straightforwardly qualified to profit from this provident fund. At the same time, protection benefits are given as annuity benefits from the day of joining the association. Therefore, any organization with twenty or more laborers is at risk of giving EPF advantages to the laborers.

How to open an EPF account? 

As per the rules and guidelines of the government of India, on behalf of the employee, only an individual who is working with an organization or employer is eligible to open an EPF account. Generally, all the legitimate organization has an EPF account for their employees.

It all starts when the employer asks the employee to sign a form giving all the personal details and also the name of the nominee. Once the form is duly filled up, it needs to be sent to the EPF organization. After processing and thorough verification, the EPF Organization activates the account, and later the account number is generated for both the employee and the employer.

The EPFO also provides the employee with a UAN or universal account number with which the employee can access his or her EPF account online, thereby enjoying all the benefits thereon.

How to register for EPF? 

To register your EPF, you need to visit to the administration site, employee provident fund organization, or EPFO. First, go to the segment called “foundation registration,” which opens up with the ‘Guidance manual.’ The manual will give you a vivid picture of the cycle of employer registration, which falls under the enlistment of DSC of the employer that is necessary for a new application. Now you need to acknowledge the manual and fill in the subtleties to enlist. An email e-connect will be sent to you at that point with the portable PIN. Then transfer the certain archives to enroll.

And at the end, the individual who has now become the enlisted can have their UAN.

Advantages of EPF or PF

There are several benefits associated with EPF. However, you must have gotten acquainted with a few a while ago, but other than those, here are some listed below.

1. If you want to build up the pension fund, then an EPF account is the ideal choice for you. This is done to secure to secure your whereabouts financially even after you retire. You will receive the EPF as a pension that is directly dependent on the duration of your employment and the average salary the year before the retirement.
2. On the account of the death of the account holder, the pension amount must be transferred immediately to the nearest family member. However, this will happen only if the person fulfils the specified terms and conditions.
3. EPF is a government scheme. Therefore, it is a completely safe and absolutely stable investment option. So, don’t worry; your returns will be fixed and secure.

Disadvantages of EPF

Despite all the benefits EPF has, there are several drawbacks as well.

1. While you have an EPF account, you must deposit a regular amount of money throughout your professional life. It is only after the retirement you will get the amount. Therefore, if you are in dire need of cash, you can’t get a penny from that.

2. You cannot close the account before retirement unless the subscriber is no more.