What is PF in Salary & How it is useful to Employees
Why one employee should carry so moto interest to contribute towards PF . How Provident Fund is important for a employee. In this article we try to figure out the usefulness of employee provident fund to an employee and how employee contribution help employee in long run.
What is PF in Salary ?
In salary the full form of EPF is Employee Provident Fund. Knowledge regarding EPF plays vital role because it is integral part of our CTC(Cost to Company) and it generates a secured return at the time of retirement. We can also raise advance or loan during emergency.
Related article :
How to calculate EPF in Salary
What is Salary ?
The remuneration paid to a person in Indian Currency by employer after completion of any specified task or service in given time period like, Day, week, Month. Generally time period of Salary of Monthly. Now salary must be paid in electronic mode to the bank account of employee.
What is EPF nominee Registration ?
Nominee means the member of EPF choose or select one or two family members, so that in absence of member a nominee can apply for avail the fund or benefits of EPF.
Nominee registration is mandatory and to be resister in online mode only. An EPF member need to access his or her UAN portal to fill the application form and provide all the desired details and submit for successful registration.
Eligibility of EPF :
Eligibility of PF is mandatory beknowing about the contribution and the rate of interest. To become a member of PF scheme one has to be a employee and he or she must have worked 30 days in any establishment which has coming under the purview of EPF.
An establishment must have obtained EPF code allotment letter before submitting EPF contribution of the employees.
Is EPF mandatory for all employees ?
Yes, EPF is mandatory to all employee who are drawing salary less than Rs. 15,000 per month. If any employee getting more than Rs. 15,000 then both employee and employer consent is required to become the member of EPF.
Is EPF only for Government Employees ?
No, EPF applicable to all sector employee. EPF is applicable to any employee who is getting salary equal or less than Rs. 15,000 per month. There is no such criteria specified as such.
Is PF applicable to everyone ?
Applicability of EPF depends on following criteria. One he or she must be a employee. Second he or she must be getting salary of Rs. 15,000 per month. If any employee drawing more than Rs. 15,000 both employee and employee to declare about the membership under EPF.
IS PF mandatory for salary above 25000 ?
No, PF is not mandatory to those employees who are drawing salary more than Rs. 15,000.
Who is eligible for EPF benefits ?
As per EPFO rules, any PF member can be eligible to avail EPF benefits. In PF scheme the member will find the benefits like Pension benefits, Insurance benefits, loan benefits, safe investment facility.
Is it beneficial to withdraw EPF ?
In some case or during emergency one can withdraw EPF, however in long run withdrawal of EPF is not beneficial to employee. The effect of compound interest get disturbed in long period.
What are the advantages & disadvantages of PF ?
EPF scheme caries its own advantage and disadvantages. Let us figure out some important points.
Advantages:
- Safe and Secured
- Employer Contribution
- Insurance coverage
- Pension facility
- Emergency withdrawal benefits
- Compound interest helps to grow money
- Tax Benefits
- Voluntary Provident Fund
Disadvantages :
- Less return as compared to Mutual Fund
- Interest rate changes every year
Is Interest rate varies every year ?
Yes, It varies every year. It depends on the GDP of the particular year. Central government notify at the time of change.
Only employee can be member of EPF ?
Yes, When your employee and employer relationship established, then only you can be member of EPF.
What is the salary limit for PF ?
Rs. 15,00 per month is the salary limit for the eligibility of EPF.
What is the Salary limit for Penson ?
When employer deposit contribution for Pension, the salary limit is Rs. 15,000. It means employer deposit 3.67% of Rs. 15,000.
How much can I withdraw from PF ?
It depends on what is the cause you are putting while submitting withdrawal claim.
Which is better EPF & PPF ?
Both has separate importance. In my opinion you should opt both if you want safe and secure return of your contribution.
What is the lock period of EPF ?
There is no Lock period of EPF. An employee can withdraw it anytime.
What is the difference between PF & EPF ?
PF means Provident Fund & EPF means Employee Provident Fund. Basically there is no real difference.
What is PF in Simple Word ?
Provident Fund: Means the Fund kept for the Future requirement.
What are the two Parts of PF ?
Main two parts of Employee Provident Fund are
Employee Provident Fund: Enlarge lumpsum amount by monthly deposit & interest compounding.
Employee Pension: Provides Pension to employees after retirement.
What are the three parts of EPF
Under the Government of India various schemes are aligned with EPF scheme. They are given below,
Employee Provident Fund : Enlarge lumpsum amount by monthly deposit & interest compounding.
Employee Pension : Provides Pension to employees after retirement.
Employee Depository Linked Insurance: Provide Death Insurance Coverage
