You might be wondering what EPF means. It is a scheme under which employees can create wealth throughout their working life. It is tax exempt up to a certain amount and acts as a retirement corpus, which is useful for building a sufficient retirement corpus. In this article, we will discuss EPF meaning in different categories and contexts. Read on to find out how this tax saver scheme works and what you can do to maximize your contributions.
Employee Provident Fund (EPF) is a scheme in which you can create
Your employer must approve your application to withdraw funds from your PF account. To make this process easier, you can ask your employer to send you a notification through email or through your EPF portal. Once you send the notification, your employer will verify your application and forward it to EPFO. During the application process, you will see a Captcha code. You will need to input it into the appropriate field and click on “GET PIN” button. You must also check the certification before submitting the form.
Withdrawals from your EPF can be made once you have been unemployed for at least one month. If you are unemployed for two months, you can withdraw the entire corpus. Withdrawals are not taxable for people with at least five years of continuous service. You can withdraw 75% of your EPF in one month, and 25% if you are unemployed for two months. You can transfer your balance to a new employer if you are unable to work for the first six months.
It is tax exempt up to a certain limit
The contributions made to your EPF account are tax-free up to a specified limit. EPF is under the EEE taxation regime. You are not liable for tax on your contribution or accrued interest. In addition, contributions made by your employer are tax-free up to a specific limit. The new budget 2020 proposes a new limit for the employer contribution. Here is how to calculate your taxable contribution.
An employee can contribute up to Rs. 5 lakh to their EPF account without paying taxes. Any amount over this limit will be subject to tax. An employee can also claim a tax deduction up to Rs. 80C for contributions made by them. As long as an employee maintains a minimum investment period of five years, contributions to their EPF account are tax-exempt up to a specified limit. If you decide to withdraw your PF contributions early, you need to pay the tax saved and file revised income tax returns.
It is a tax saver fund
The Employee Provident Fund (EPF) is one of the tax-saving schemes offered by employers. Your employer contributes up to 12% of your basic salary towards this fund. This can add up to a substantial amount that you can use to meet your retirement expenses. You can make contributions to your EPF if you want to. To make the most of these deductions, you need to invest wisely.
Moreover, the entire balance of your PF is tax-free once you withdraw it after five years. However, you must note that the interest on excess contributions is taxable if you exceed the limit of 2.5 lakh rupees. For government employees, the limit is raised to 5 lakh. The benefits of this tax-saving scheme are many. So, why wait? Invest your money in an EPF account and start reaping the benefits.
It helps employees build a sufficient retirement corpus
The Employee Provident Fund, or EPF, is a pension scheme that enables salaried employees to save towards their retirement. Added regularly under the UAN, the fund has tax benefits and guarantees higher earnings for the employee in the long run. The EPF has helped many employees build a sufficient retirement corpus. Whether you’re a salaried employee or are considering a new job, EPF is one of the best options for building a sufficient retirement corpus.
The EPF account is open for everyone, and employees can check their account balance any time they wish. The money in your account is invested in a fund that grows in value over time. Each month, your EPF contribution accrues interest that you can use to fund your retirement. Your employer will contribute 3.67% of your salary to your EPF account. The rest of your salary goes to your EPS account. Employers bear three additional costs – EDLIS, EPF admin charges, and EPF contribution.