Employees Provident Fund Scheme 1952
Under Employee provident fund scheme mainly three schemes are controlled by Employee Provident Fund Organization, Government of India i.e. Employee provident fund scheme, Employee Pension Scheme & Employee depository linked Insurance.
In EPF scheme mainly a lumpsum amount to be received to the member after his/her retire from service. Then in EPS scheme a recurring amount to be received to the member after retirement till death. And after death 25% of his/her pension amount will be given to his/her dependent. In case of EDLI, it is a death insurance scheme . A certain lumpsum amount will be given to the dependent after the demise of member.
There were other schemes related to EPF also run by Government of India time to time. Like Pradhan Mantri Rastriya Protsahan Yojana (PMRPY). Under PMRPY Government will support the employer by providing employer contribution till the period of 5 years from the starting day of business.
Many Schemes were also lunched for benefits of employer. Those schemes were mainly taken-off to encourage entrepreneurship and increase employment in the country. In the time Covid it was declared to file 10% of basic wages from both employee & employer contribution.
What are the schemes of Provident Fund in India ?
- Employee Provident Fund Scheme
- Employee Pension Scheme
- Employee depository Linked Insurance
Employees Provident Fund Scheme,1952
Which company is eligible for Employees Provident Fund Scheme?
Any Establishment /company where 20 or more employees are or were working, then that establishment/Company is eligible under EPF scheme.
When a Employee eligible for Employees Provident Fund Scheme ?
When a employee is working for 30 days of working days in a establishment where 20 0r more employees are already working, then that employee is eligible for EPF scheme.
Benefits of the Employees Provident Fund Scheme :
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- Safe Account
- Interest free Loan facility
- Advance withdrawal in emergency
- Annual Compound Interest
- Voluntary contribution apart from compulsory fund.
- Tax benefit of EPF contribution.
- Free Pension & Insurance benefit
Employee Pension Scheme :
Under EPS some portion of Employer contribution is segregated and deposited to Pension account of employee. At the time of retirement or superannuation an monthly payout is given to employee as pension.
8.33% of Basic+ Dearness allowance is considered as Pension contribution and it is given by Employer every month to pension account of employee.
An employee is eligible for Pension when he/she has completed 10 years of continuous service wither in one establishment or in different establishment.
Pension is calculated on PENSIONABLE SALARY at the time of retirement by multiplying with numbers of years of service rendered and divding with 70.
What is Pensionable Salary ?
Pensionable Salary is the average Salary(Basic+ Dearness allowance) of last 6 years at the time of retirement or superannuation or death.
Employee depository Linked Insurance :
Insurance benefits is provided to family dependents of employee after his/her death.
Benefit of EDLI
- Insurance coverage of EPF member
- Nominee of Employee receive lumpsum corpus after death of PF member.
- At max Rs. 7 Lakh will be given to family member of Employee
- No contribution given by Employee, It is complete paid by Employer.
- 0.5% of Basic pay & dearness allowance will be deposited as EDLI contribution.
What is the Procedure of availing EDLI ?
Q&A Section
What is Calculation formula of EDLI?
Claim Amount = (35 X Basic Average Salary or Maximum 15,000) + (50 % of Average Balance in EPF Account or Maximum 1.75 Lakhs) The average basic salary drawn during the twelve months preceding the month in which employee died.
What is maximum EDLI Claim Amount ?
Rs. 7 Lakhs is the maximum limit of EDLI claim Amount.
What is minimum EDLI Claim Amount ?
Rs. 2.5 Lakh is the minimum EDLI claim Amount.
What is the fine to be paid by Employer due to non payment of EDLI Claim Amount ?
25000 to be paid by Employer as fine for non-payment of EDLI claim amount by Nominee after expiry of Employee.
EDLI calculation how much times of the basic average salary
35 Times of average basic salary for EDLI calculation.
What is the wage ceiling for calculating EDLI ?
Rs. 15000/- is the wage ceiling for calculating EDLI.
How many preceding months are considered for calculating average month as per EDLI calculations ?
12 months is considered to calculate EDLI after expiry of employee.
What Factors responsible for EDLI Claim Calculation ?
If we analysis the calculation of EDLI, we find the below two factors responsible,
- Basic wages of employee at the time of death.
- Average Balance of money remained in the EPF account of Employee.
What is the Concept of EDLI ?
The fundamental concept of Employee depository Linked Insurance is to protect the dependent of employee after his/her death by assuring certain amount of corpus money in the hand. The money may act as financial assistance to the family in the absence of the guardian.
What are the documents required for EDLI claims ?
Following documents are required for EDLI claims,
- Death Certificate of Employee.
- Aadhar card of Employee
- Legal heir certificate of dependents and their Aadhar cards.
- UAN details of Employee
- Bank Account details/Cancel Cheque of Nominee or dependents.
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