Employee Provident Fund is a saving scheme which was introduced under the Employees Provident Funds and Miscellaneous Provisions Act, 1952. The scheme is regulated by The Employees Provident Fund Organization (EPFO) under the administrative control of the Ministry of Labour and Employment, Government of India. The scheme helps employees to save some portion of salary so that these savings can provide benefits after their retirement or in case of any misfortune. Under EPF Scheme, Employee has to pay certain contribution towards the scheme and equal amount of contribution is paid by employer as well. The employee receives a lump sum amount including both own contribution and employer contribution along with interest amount on retirement.
Benefits of Employees Provident Fund Scheme
- Tax Savings i.e. deduction u/s 80C
- Higher Returns
- Lifelong Pension Benefit
- Insurance Benefit under employees deposit linked insurance scheme by contributing just 0.5% of salary as premium
- Premature withdrawal option