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Under EPF (Employees Provident Fund), it is advisable to transfer PF accounts between organizations as and when employees change their jobs.
Earlier subscribers had to file separate EPF transfer claims which is Form 13 (For transferring PF / pension between different accounts) regarding the same.
However, EPFO (Employees Provident Fund Organization) has declared that the subscribers no longer have to file separate EPF transfer claims using Form -13 as it will now be done automatically.
Although, at the time of joining, the employees are required to provide details of the previous EPF account in new composite F-11 form (which is a declaration form by a person taking up employment in any establishment on which EPF scheme is applicable). And after that funds will be automatically transferred by the EPFO to new EPF account.
An official of EPFO also said that they are deciding upon providing Aadhaar card and bank accounts of the employees along with to use new F – 11 composite form.
Also, note that recently EPFO (Employees Provident Fund Organization) have mandated linking Aadhaar number with the EPF account after Government made Aadhaar mandatory for all the other official documents. This linkage will also help to avail subsidized scheme easily where the subsidized amount will be transferred directly into the account.
To know more about the linkage between Aadhaar card and EPF account read
So, the Composite declaration form (F – 11) is replacing form 13 (For transferring PF/pension between different accounts) which is decided by the EPFO.
EPFO (Employees Provident Fund Organization) which works under the Ministry of Labor and Employment has also introduced an online portal where a subscriber can check EPF claim status online as well. And this process is easy and hasslefree. And only an EPF member or subscriber can make a withdrawal claim.
The EPFO which is otherwise called as the Employees Provident Fund Organization has come up with another online facility for correcting the details such as the name, date of birth etc. of an employee. It has been found out that, people are facing a lot of issues regarding the making of the corrections or modifications of the details of the EPFO account holder. This is the reason due to the mismatch in the name, date of birth or gender in the UAN Data and UIDAI (Aadhaar) data says the Retirement Fund Body EPFO.
The UAN or the Universal Account Number is a unique number that is assigned to an employee which serves as an umbrella for multiple member IDs provided to an individual by different establishments where he or she has worked. The UAN helps to link with multiple member IDs allotted to the single employee under a single UAN.
How to Modify the Details of the EPF Account Online
In case of the offline mode, if an EPFO subscriber wants to make any correction on his/her basic details such as the name, date of birth etc. then the employee and the employer has to submit a joint request to the concerned EFO Office. This process was a bit complex and time-consuming. Therefore, to minimize the pressure the EPFO has introduced the online facility. Now the subscribers can request online to make corrections in the basic details.
While accepting a request from the member, the system will compare and analyze the requested changes with the similar fields receives from the UIDAI (Aadhaar). After a successful verification, the request will be transferred automatically to the employer’s login for the online transmission to the EPFO field office. After getting the online request the EPFO will process the requested corrections.
Below are the steps to correct the Name, Date of Birth and Other Details of the EPFO Subscribers:
- Log in using the Member Interface of Unified Portal through the UAN Password.
- Click on the Manage section and select for “Modify Basic Details” option.
- Provide the required details as mentioned in Aadhaar (the system will verify the details entered with UIDAI Aadhaar Data.
- Click on the update details. The request will be sent to the employer for further approval. The employer can also withdraw the request if he/she wants to delete/reject Request.
- The employee has to log into the Employer Interface Unified Portal. The employer can view the change requests that have been submitted by the employees, so that the employer can take action for the further procedures.
After the approval of the request, the employer can view the latest request status. After the approval of the request, it can also be viewed in the EPFO Unified Portal. After the verification, the person can submit his/her recommendations to the Section Supervisor. Finally, the EPFO Office can approve as well as reject the case.
The EPFO (Employee’s Provident Fund Organization) has launched a new online facility for over 4.5 crore members. This facility allows merging their multiple provident fund accounts with the current Universal Account Number (UAN)…Read More
The EPFO (Employee’s Provident Fund Organization) has launched a new online facility for over 4.5 crore members. This facility allows merging their multiple provident fund accounts with the current Universal Account Number (UAN).
Under this facility, the subscriber can merge as many as 10 previous accounts with their UAN in a go. Currently, the EPFO subscribers are requested to file separate transfer claims online using the UAN on the EPFO’s UAN Portal.
To avail this facility, the subscriber has to activate their UAN which is seeded with the bank accounts along with the other details such as the Aadhaar and PAN details. It states that “One Employee with One EPF Account”.
According to the Official, the EPFO has already issued a direction to its over 120 offices earlier this week to use this service. The objective of this service is to ensure that a multiple number of accounts are consolidated as early as possible.
The subscribers have to provide their current activated UAN, their member ID (identification) and registered mobile number at UAN Portal. After the validation of the credentials of the members, the EPFO will allow them to register their previous EPF Account numbers for the consolidation with the current UAN.
This online facility can be accessed on the EPFO Website located at the “Employees Corner”.
Interest rates of EPF (Employees’ Provident Fund) keep on falling. Two years back, EPFO (Employees’ Provident Fund Organizations) paid 8.8% on EPF balances. And now the Central Board of Trustees (CBT) of the EPFO is putting forward a reduction of interest rate on PF balances to 8.55% for 2017 – 18 as compared to 8.65% the year before.
In defiance of the falling rates of EPF, it still holds saving advantages over other retirement savings fund.
In respect to the matter, CEO and founder of Clearfunds.com said that
it is backed by Government of India, and secondly, while the rates may vary each year, they generally move around a small band. Importantly, EPF is tax – free during the period interest is earned as well as at the time of withdrawal”.
Benefits of Investing in EPF
EPF comes with a lot of advantages which are as follows:
- In EPF, interest earned on funds is tax – free
- Investing in EPF guarantees savings as one cannot withdraw from its account easily. And in retirement, that saved money can be used for financial security. Or the funds can also be used at the time of the emergencies in life
- If an employee is planning a long – term investment, this scheme is just for them
- In times of need, especially in certain cases such as marriage, medical, housing, education, EPF funds can provide an employee much needed liquidity
- EPF can also be transferred from one company to the other through UAN (Universal Account Number) if you changes your job
Difference Between EPF & PPF
EPF (Employees’ Provident Fund) and PPF (Public Provident Fund) are both long term investment schemes. However, both are different schemes which are as follows:
|Lock – in – Period||There is no lock – in – period||The maturity period of PPF is after 15 years and one can extend up to 5 more years|
|Tax Implication||EPF qualifies under 80 C of Income Tax Act||PPF qualifies under U / s 80 C. However, on maturity there is no tax|
|Interest Rates||8.65 % two years back. And new suggested interest rate is 8.55 %||The interest rate for now is 8.7 per cent|
|Loan Option||The account holders can avail loans only for conditions applied by the authority||Account holders can apply for loans up to 50 per cent of the balance of the 4th year from 6th year onwards|
|Withdrawal Facility||An individual having an amount can withdraw amount for personal needs providing necessary documents||Individuals cannot withdraw money till the completion of tenure|
Rate Comparisons Between EPF Vs Other Retirement Savings Scheme
|Instruments||Interest Rate of 2017 – 18 (in %)*|
|Savings Deposit (SD)||4|
|5 Year Time Deposits (TD)||7.4|
|5 Year Recurring Deposit (RD)||7.1|
|5 Year Monthly Income Schemes (MIS)||7.3|
|5 Year National Savings Certificate (NSC)||7.6|
|Public Provident Fund (PPF) Scheme||7.6|
|Employees Provident Fund||8.55|
*2017 – 18 Q4 Rates / as per latest announcement
Employees Provident Fund or commonly known as EPF is a retirement savings scheme which is managed and administered by the Central Board of Trustees. It is a collection of funds contributed by the employer and his employee on a month on month basis. EPF serves to a large number of people spread across the country. It is also considered to be one of the largest organisations and is acknowledged globally. The current Interest rate on EPF savings are 7.8% .
How to Calculate EPF Interest Rate
At present, the Government is clinging on to the rate of interest for General Provident Fund (GPF) and other related schemes at 7.8% for the October – December quarter. And the rate is in accordance with that for Public Provident Fund (PPF).
Contribution Structure of EPF
EPF has been categorized into two parts which are as follows:
- Contribution made by Employee
In this category, 12% of the basic salary of the employee will be deducted from employee’s salary.
- Contribution made by Employer
In this category, contribution made by the employer is also 12% which is the basic salary of the employee. In spite of that, this 12% is further subdivided into the following four parts which are as follows:
- Employee’s Provident Fund (EPF) – 3.67%
- Employee’s Pension Scheme (EPS) – 8.33%
- Employee’s Deposit Link Insurance Scheme (EDLIS) – 0.50%
- EPF Admin Charges – 1.10%
- EDLIS Admin Charges – 0.01%
Also, please note that in case the basic salary of the employee plus the Dearness Allowance (DA) is more than Rs. 15,000 then employer’s contribution towards employee’s EPF will have three options to choose from which are:
- Employees or company’s contribution of nearly Rs. 15,000 yearly can be restricted by the employer
- Employer may contribute towards EPF an amount equal to employee’s own contribution
- Employer may restrict your share in EPF as 12% of the salary while its own share to Rs. 15,000
Things to Ponder over at the time of Calculating EPF Interest
EPF contributions are shown by the employer with respect to the salary due. For example, salary for the month of August will be paid in September and the EPF contribution for August will be shown in September and not in August.
In case of death of the employee, the interest is payable till the month preceding the month in which death occurred.
Now let us look at some of the new Amendments made to EPF and EPS Schemes.
According to the new amendment, an EPF holder can nominate a family member as a beneficiary / nominee. The beneficiary or nominee would receive Rs. 3 lakh as insurance coverage, in case of sudden demise of the member. Earlier, the value was only Rs. 1.56 lakh.
Earlier, the minimum contribution was set at 12% of Rs. 6,500. However, it has been revised to 12% of Rs. 15,000 per month. Hence, the employees are now expected to contribute Rs. 550 per month and Rs. 1,250 per month towards EPF and EPS, respectively.