Legal cases with fixed pricing, standardized processes, and firm timelines
Investment is one of the key ways to save money and have some form of financial security in the future. The most common investment methods are an investment in property, putting money in stocks, mutual funds, etc. One such investment option for employed individuals is the Employee Provident Fund (EPF) which provides financial soundness, especially after retirement or in case of a financial emergency.
Working individuals have the option to keep a part of their salary invested in EPF, which is transferred directly by the employer in the PF accounts of the employee. The contribution by employer and employee are maintained by the Employees Provident Fund Organisation (EPFO) which is controlled by the Ministry of Labour and Employment. The employment laws related to the provident fund are laid down under the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952.
EPF is contributed on a monthly basis from the employee’s salary to their Universal Account Number (UAN) which has a unique PF account number. This unique number is attributed to a person and not an employer, so the person can change multiple jobs without transferring their PF from one account to another.
Each month, the employer transfers 12% of an employee’s salary in their provident fund account. A maximum of 8.33% or Rs. 1250 is allocated to the provident fund and the balance is transferred to the Pension Scheme. An interest of 8.65% p.a. is given on the PF contribution. Also, the employer contribution to EPF is tax-free and deductible under Section 80C of the Income Tax Act, 1961. A person is entitled to the pension if they have worked for at least 9.5 years throughout their life.
Is PF applicable to all businesses?
The provident fund laws in India are only applicable to the following businesses:
An employer who fails to comply with the provisions of the PF Act or fails to furnish any payment would be liable to be punished with imprisonment for up to 1 year, fine of Rs. 5000, or both.
An employee can nominate a person who will be handed over the money at the time of the employee’s death. A nominee can be assigned by submitting Form-2 with the EPFO. An employee whose basic salary combined with a dearness allowance is more than Rs. 15,000 can opt-out of the employee provident fund scheme. However, an employee cannot opt-out of the scheme once they have chosen to create a PF account.
Can a person withdraw money from the PF account anytime?
No, an employee can withdraw money from their PF account only in certain circumstances, which are as follows:
Need to know more? Talk to the best employment experts at MyAdvo! Email us at firstname.lastname@example.org or call now at 9811782573.