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EPFO: Structure, Applicabilty, Functions, Services,Etc.

You may have heard many times about this term, in fact the money in the name of Provident Fund is already deducted monthly from your salary but you are still not sure what it really is! We hope you understand the same to the end of this article. So what exactly is a provident fund? In short, it is the type of investment fund provided by you and your employers per month, for which a lump sum payment is made upon retirement / retirement. For a better understanding, a detailed description of the Employee Provident Fund Organization (EPFO) is provided-

Employees’ Provident Fund

The “Principles of National Policy” under the Constitution of India states that all provinces will make effective provision for their citizens in terms of employment, education and social services subject to unemployment, old age, illness and disability. Currently this action includes the following three programs-

  • EPF-Employees’ Provident Fund Scheme, 1952
  • Employees’ Deposit Linked Insurance Scheme, 1976
  • Employees’ Pension Scheme, 1995

EPFO- Employees’ Provident Fund Organization

The Employee provident fund came into operation with the promulgation of the Employees' Provident Funds Ordinance on 15 November 1951. This practice was replaced by the Employee Provident Funds Act of 1952. It is currently known as the Employees' Provident Funds. and the Miscellaneous Provisions Act 1952, which applies to the whole of India except the provinces of Jammu and Kashmir.

EPFO ​​is considered to be the largest public safety organization in the world in terms of the number of services performed and clients. It operates under the control of the Indian Government Department of Labor and Employment. Currently, it maintains accounts for 17.14 crores of its members. (As of the 2015-16 Annual Report). All programs under this Act are regulated by the Central Board of Trustees (CBT). Typically, CBT manages a provident fund, pension scheme and insurance scheme for employees working in the country's organized sector.

Applicability of the EPF

Employee's Provident Fund (EPF) is a benefit scheme available to all leading employees whether they are government employees or employees of private companies. EPF is managed by the Employees Provident Fund Organization of India (EPFO). In addition, every company with more than 20 employees is required to register with the EPFO. Also, all of your EPF information is available on the official EPFO ​​website and you have been provided with an International Account Number (UAN) to access your account and details.

In short it is applicable to-
  • Factory foundations operating in any of the industries specified in schedule 1 and in the workforce of 20 or more employees.
  • Other Foundations in which employment of 20 or more individuals are notified by central government.
  • Organizations, where less than 20 people work, can be voluntarily formed under section 1 (4).

Structure of EPFO

EPFO legislation is regulated by the Board of Trustees. Looking at the structure, it consists of the Executive Board and the Executive Committee comprising of the following-

Central Board

Administered by the central board of Trustees (CBT) under Central Government. Under this board the following members are included-

  • A Chairman
  • A Vice Chairman
  • 5 Central Government Representatives
  • 15 State Government Representatives,
  • 10 persons-  Representing the Employees’
  • 10 persons- Representing the Employers’

Executive Committee

Created by the Central Government by notice in the Official Gazette. Executive Committee members are elected to the members of the Executive Board, which includes-

  • Chairperson
  • Central PF Commissioner
  • 2 Official Representatives for Central Government
  • 3 Official Representatives for Provincial Government
  • 3 Employer Representatives
  • and 3 Employee Representatives

The EPFO ​​regulatory structure is subdivided into domains, led by the Provident Fund Extraordinary Commissioner. Currently, there are 10 places in total and more, each district being represented by district offices headed by the Provincial Revenue Commission (RPFC) (Grade I). Districts are also subdivided into smaller districts headed by a Provincial Fund Commissioner (Grade II). Assistant Commissioners of the Social Security Fund are also appointed to assist them and ensure that the actions and programs are effective.

In fact, most states in the country have regional offices headed by a provident fund commissioner to ensure the implementation of this law.

Functions Of EPFO

EPFO performs two functions, one as a regulator to determine usage and the other as a service provider. Its main function includes the provision of retirement benefits for private and public servants. Overall it does the job of paying claims, maintaining individual accounts, and managing payments under the pension scheme and so on. In addition the EPFO ​​performs the functions listed below-

Functions of the Regional Committee Formed under EPFO
  • Issuing annual account receipts to fund members
  • You are responsible for resolving disputes quickly
  • Punishing immediate progress
  • See progress on Fundraising donations Provident
Functions of the Executive Committee Formed under EPFO
  • Opening sub-district offices
  • Creating new districts and reviewing old
  • Explain the working principles of all employees and officials of the organization
  • li> Identifying land acquisition proposals and buildings etc..

How does the Scheme work – Contribution and Interest?

The contribution to the Provident Fund is made @ 12% of your basic income and allowance (DA). You and your employer both contribute 12% per person and 12% provided

by you go directly to the EPF account and the other 12% deposited by the employer goes to the EPF account and are diverted to Employee's Pension Scheme. Generally, 3.67% goes to EPF A / c and 8.33% goes to the pension scheme.

All of these contributions are invested by the interest-bearing trust fund at a rate determined by the Government. Currently (FY 2018-19), the rate is 8.55% down from 8.65% FY 2017-18. In addition, although you make monthly contributions, interest is calculated annually on the amount representing your credit from 1 April of that year. Next year, interest will be calculated on the balance accumulated in the EPF account ie balance balance + total contribution + interest rate.

Let's understand the interest calculation in the example below: Basic Income + DA = Rs. 30,000 / - FY interest rate 2018-19 = 8.65% per annum i.e. 8.65 / 12 = 0.7208% per month

In this case,

Particular Amount (Rs.)
Employee’s Contribution towards EPF (30,000*12%) 3600
Employer’s contribution towards EPS (30,000*8.33%) 2500
Employer’s contribution towards EPF (30,000*3.67%) 1100
Total contribution towards EPF (3600+1100) 4700

Assuming there is no balance in EPF account, contribution starts from this year :

PF A/c

Month Month Month Opening Balance of EPF A/c Total contribution for this year (Employee+Employer) Interest  Closing balance 
April 2018 0 4700 0 4700
May 2018 4700 4700 67.8 9467.8
June 2018 9467.8 4700 102.1 14269.9
July 2018 14269.9 4700 136.73 19106.63
Aug 2018 19106.63 4700 171.59 23978.23
Sep 2018 23978.23 4700 206.71 28884.94
Oct 2018 28884.94 4700 242.08 33827.02
Nov 2018 33827.02 4700 277.70 38804.72
Dec 2018 38804.72 4700 313.58 43818.31
Jan 2019 43818.31 4700 349.72 48868.03
Feb 2019 48868.03 4700 386.11 53954.14
March 2019 53954.14 4700 422.77 59076.92

This interest will be calculated monthly in the above format and will only be included at the end of the financial year

Services Offered by EPFO

Under the EPFO ​​many services are provided to a variety of people including Employers, Employees, International Workers, Pensioners. A detailed description of all the services is described here-

1. UAN

UAN is a 12-character Universal Account number assigned to an EPF person (employee). Issued by the Department of Employment and Labor under the Government of India. The UAN was introduced by the current Prime Minister Mr. Narendra Modi in 2014 for the purpose of linking all PF accounts and members' IDs under the same umbrella. Your Provident Fund account is owned by a given number as a UAN and will remain the same no matter how you change jobs.

UAN provides services namely connecting the previous member's ID with the current ID, updated UAN card, PF passbook update, SMS related to donation to PF etc.

2. Registration of Establishments Online

Employers can be easily registered under the EPFO ​​portfolio by providing basic information as requested by the Department of Labor and Employment. It can be done by staying home online and you do not need to make any further effort to visit the EPFO ​​office.

3. PF Withdrawal

Withdrawal from PF account can be done in case a person is unemployed for more than two months or didn’t get any job within a time period of 60 days from leaving the previous job. So in such case, a person can online withdraw from PF Account.

4.UAN Member E-Sewa for Employees

A person with an active UAN number can take advantage of the e-sewa portal. Under this portal members can view information such as KYC, Profile, Service History, UAN card, EPF passbook, EPF tracking status, etc.

5. Online Payment of PF

As of September 2015, it is compulsory for all parties to pay PF online. The employer can make PF payments in two forms-

  • Through EPFO Website
  • Or by visiting the employer’s bank website

Currently, only a few banks offer this service and include banks i.e.-

SBI, Allahabad Bank, Union Bank of India, PNB, HDFC Bank, Bank of Baroda, Kotak Mahindra and Axis Bank.

6.Grievance Services

It is a one-stop solution to any EPFO-related issues. Under the EPFO ​​grievance procedure you can lodge a complaint about any matter namely PF Transfer, PF Withdrawal, etc. The introduction of online grievance services has significantly reduced human affairs.

7. SMS and Missed Call Services

To use these services the UAN must be configured. Once activated, EPFO ​​members can obtain the required information by sending an SMS to the given number 7738299899. The SMS format is EPFOHO UAN, followed by the first three letters of the message in the selected language. Members can also find information by calling missed number 011-22901406.

8. Helpdesk- Inoperative Accounts

Non-functional PF accounts are those accounts for which no donations have been made in the last 3 years. Therefore these accounts are switching to inactive mode from February 25, 2015, the help desk for the inactive accounts has been suspended online. And through this helpdesk members can pay for their PF account

9. Coverage certificate for International Workers

Members who work outside India but have a Community Safety Agreement in India can obtain a Certificate of Detention (COC). It is initiated by the Government of India for the benefit of the Employer and both employees.

10.Passbook and Claim status

On the EPFO ​​website, members can claim status and check your passphrase , etc. by providing UAN information.

Is it mandatory to contribute to PF? What happens in case of a job change?

Well, it is an obligation for employees with a minimum wage and a grant of up to Rs. 15,000 (previously Rs. 6,500). And those earning more than Rs. 15,000 can donate voluntarily.

Also, in case you change jobs, your EPF account remains the same, you just have to notify your previous and new employer of the job change and EPF account details. Everything else is the same except that your new employer is now contributing the amount to your EPF account.

When can you withdraw money from your PF Account?

You can withdraw money from an EPF account if you are not employed at that time and the 2-month waiting period has passed except for the following 2 instances where you do not have to wait for 2 months:

  • If possible, you are employed elsewhere, or
  • you are a woman leaving the service to get married.

Generally, withdrawals are not allowed in your EPF Account, but you can withdraw some money from your EPF account in the following cases:

  • Your expenses in connection with marriage, education, emergency medical expenses;
  • Marriage, education and treatment of siblings and children;
  • Medical treatment for foster parents, spouse or children;
  • Buying a Home / Flat / Building / Including Housing.
  • The cost of replacing your house only after you have completed 5 years of service;
  • for home loans only after you have completed 10 years of service;
  • Payment of existing loans is subject to 10 years of service.

What are the tax benefits of EPFO?

Particulars Statutory Provident Fund Recognized Provident Fund Unrecognized Provident Fund
Employer’s Contribution Exempt. Exempt up to 12% of Salary. Exempt.
Employee’s Contribution Deduction u/s 80C subject to Rs. 1,50,000 limit. Deduction u/s 80C subject to Rs. 1,50,000 limit. Deduction u/s 80C is not available.
Interest Exempt. Interest credited to such fund upto 9.5% p.a. is exempt. Exempt.
Lump sum Amount received at the time oftermination Exempt/s 10(11) Exempt subject to certain conditions. Employee’s contribution is exempt & interest on employee contribution is taxed under the head “Income from other sources”.Employer’s contribution and interest thereon are taxed as salary income; however, an employee can claim relief u/s 89 in such case.

To better understand this concept, let's say, Ms. Somani earns Rs salary. 20,000 per month and contributes 12% of his salary which is Rs. 2,400 per month on Statutory PF. Her employer also donates the same amount (Rs. 2,400 per month). Then, in that case, the employer's monthly contribution of Rs. 2,400 will be released from his hands. Interest @ 8% p.a. on balance 1 April (say Rs. 60,000) and will be released from his hands namely Rs. 4,800 (60,000 x 8%).

In addition, 12% contributed by Ms. Also, in the coming year, you will be entitled to the interest rate exempt of Rs. 9,792 (calculated @ 8% on final balance Rs. 60,000 + total current year contributions Rs. 57,600 + last interest Rs. 4800).

Even at retirement we say that after 25 years, the amount collected from his PF account will also be released.

Is PF different from PPF?

In theory, there is not much difference, but nevertheless, the following differences prevail:

  • Although PF is only for paid employees, PPF is for all people who can contribute equally to the fund.
  • In PF, both employer and employee contribute, while in PPF only. each person contributes.
  • In the case of PPF, the full investment cannot be withdrawn before the end of 15 years, however you can withdraw a little from 7th year th , i.e. after graduation. 6 years. While in PF you can do it under certain conditions.

Frequently asked questions

You can check the PF balance online by entering the EPFO ​​portal. Here select the Our Services tab and below select the staff. Now click on the Member Password tab under the Services tab. In addition, a screen will appear asking for the details of the UAN number and password. For a complete understanding of the process read the full article.

To link your existing PF account with the UAN visit the EPFO ​​portal. Click One Employee - One EPF account tab under services. The form will open here, enter all the requested details. Enter UAN details and current member ID. As soon as you submit the form, you will receive an OTP on your registered mobile number. Install OTP. Further a page will be displayed where you will need to specify the old PF account details and accept the announcement. After the process is complete, your request to merge a PF account is sent to the EPFO.

Yes, the contribution made to EPF is exempt from / s 80C of the Income tax Act, up to a certain point and the contribution made by the employer or employee is both exempt. EPF withdrawals are also exempt from income tax if they are withdrawn after 5 years.

The Employees ’Provident Fund Organization allows employees to withdraw part of the money from the fund and use it as a personal loan under certain specified circumstances. Although in order to approve the requested amount, EPFO ​​verifies and evaluates it carefully.

The Employees ’Provident Fund Organization allows employees to withdraw part of the money from the fund and use it as a personal loan under certain specified circumstances. Although in order to approve the requested amount, EPFO ​​verifies and evaluates it carefully.

You can get your UAN number from your employer. As all employers have information related to the UAN number of their employees.

If you have any questions or concerns about the UAN Member portal you can request by calling 1800 118 00 or by email

Krishna Gopal Varshney

“Krishna Gopal Varshney co-founder & CEO of Myitronline is amongst the top emerging startups of Asia and authorized ERI by the Income Tax Department. A dedicated and tireless Expert Service Provider for the clients seeking tax filing assistance and all other essential requirements associated with Business/Professional establishment. Connect to us and let us give the Best Support to make you a Success. ”

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