EPFO Benefits: Know why you PF is important for you? These 5 amazing benefits will tell you!
EPFO is one of the world’s largest social security organisations in terms of clientele and the volume of financial transactions undertaken, its website claims. As per the 2016-17 Annual Report, the retirement fund body maintains over 19.34 cr accounts. But, do you know why your provident fund is so important for you as an individual? Your employer might be deducting employee contribution towards the Employees’ Provident Fund (EPF) account every month from your salary. But EPF, which is popularly known as PF is a government established savings scheme for employees of the organised sector.
You must know that both the employer and employee are required to contribute 12 per cent of the employee’s basic salary and dearness allowance every month to the EPF account. Only employees of companies registered under the EPF Act, can invest in the EPF or PF.
See these top benefits of PF here:
- The money which is deposited in your EPF accounts earns high returns for the members who have an account with the Employees’ Provident Fund Organisation (EPFO), which is a statutory body under the Employees’ Provident Fund Act, 1956. The EPF interest rate is declared every year by the EPFO. It is 8.5 per cent for this financial year.
- This savings scheme offers tax exemption under Section 80C of the Income Tax Act.
- The government has allowed partial withdrawal facility in the wake on pandemic and unemployment.
- This scheme offers lifelong pension scheme under Pension Scheme 1995 (EPS).
If a member of the EPFO has been contributing towards the fund in a regular way, then in the event of an unfortunate death, the family of the member can avail the benefit of Insurance Scheme 1976 (EDLI). This scheme entitles the member for an amount which is 20 times his last drawn monthly salary. It can be up to a maximum amount of Rs 6 lakhs.