EPF – Salary Deductions, Interest Rates, And Check EPF Balance

Employees in several nations like India and Malaysia place a high value on their Employees' Provident Fund (EPF) accounts. The EPF is a retirement savings plan with the goal of giving employees security over their finances after their working years. The money grows over time and earns interest, acting as a nest egg for retirement. The EPF account guarantees that people have a steady income during their post-employment years, assisting them in maintaining their level of living and taking care of their financial needs. Additionally, the EPF account could provide advantages, including home loans, educational purposes, and medical costs.

If you are a salaried person in India, you must have heard of EPF or Employee Provident Fund. It is a mandatory savings scheme that helps you build a corpus for your retirement. But do you know how it works, how much EPF deduction is done from your salary, how much interest is credited to your EPF account, and how to check your balance? In this blog, read further to discover the answer to these questions and more.

What is EPF and how does it operate?

EPF stands for Employee Provident Fund. It is a social security scheme that gives financial security to employees after their retirement. It is administered by the Employees' Provident Fund Organisation (EPFO), which is an authorised body under the Ministry of Labour and Employment.

EPF works on the principle of contribution from both the employer and the employee. Every month, a certain percentage of your basic salary and dearness allowance (DA) is deducted from your paycheck and deposited into your EPF account. The same amount is also contributed by your employer. The current rate of contribution is 12% for both the employer and the employee.

However, out of the 12% contribution by the employer, 8.33% goes to the Employees' Pension Scheme (EPS), which provides pension benefits to employees after retirement. The remaining 3.67% goes to the EPF account. Therefore, the effective contribution to the EPF account is 15.67% (12% + 3.67%) of your basic salary and DA.

What is the interest gained on EPF amount every year?

The money in your EPF account earns interest at a rate decided by the Employees' Provident Fund Organisation (EPFO) every year. The interest is compounded annually and deposited to your account at the conclusion of the fiscal year. The current interest rate on EPF for FY 2022-23 is 8.15%.

What are the benefits of EPF?

EPF offers several benefits to employees, such as:

• It helps you save for your retirement by building a corpus over time.
• According to Section 80C of the Income Tax Act, it offers tax advantages. For your EPF contribution, you are eligible for an annual deduction of up to Rs. 1.5 lakh.
• It also provides tax exemption on the interest earned and the maturity amount, subject to certain conditions.
• It allows you to withdraw partially or fully from your EPF account for various purposes, such as medical emergencies, education, marriage, home loan repayment, etc., subject to certain rules and limits.
• It also provides insurance cover under the Employees' Deposit Linked Insurance (EDLI) scheme, which pays the full amount to the nominee in case of the death of the employee.

How to check your EPF balance?

There are four ways to check your EPF balance:

Online: You can check your EPF balance online by visiting the member portal on the EPFO website (https://www.epfindia.gov.in/) and logging in with your Universal Account Number (UAN) and password. UAN is a distinct 12-digit number that is allotted to every EPF member by the EPFO. The website also provides a provision to download your EPF passbook to check your monthly balance, contributions and interest earned.

SMS: To check the EPF balance without a UAN number, one can also send an SMS from their registered cellphone number to 7738299899. The format of the SMS is EPFOHO UAN . You can choose any language from English, Hindi, Punjabi, Gujarati, Marathi, Kannada, Telugu, Tamil, Malayalam and Bengali. For example, to check your balance in Hindi, you can send an SMS as EPFOHO UAN HIN.

Missed call: To obtain information about your EPF balance via SMS, give a missed call to 011-22901406 from your registered mobile number. In this method, without using your UAN number, you can check the EPF balance.

Mobile app: To check your EPF balance, simply download the UMANG app (Unified Mobile Application for New-age Governance) from either Google Play Store or Apple App Store. Then, enter your UAN and OTP to access your balance.

Individuals are better equipped to safeguard their financial security and plan for the future when they are aware of the value of the EPF account. EPF is a great way to save for your retirement and enjoy tax benefits along the way. It is important to monitor your EPF balance and maintain up-to-date personal information with the EPFO. You should also nominate someone who can claim your EPF money in case of any unfortunate event. If you have any issues or are facing any problems or have any grievances regarding your EPF account, you can contact the EPFO helpline at 1800-118-005 or visit their website for more information.