10 Hidden EPF Rules – Employee Provident Fund

11/1/2014 10 hidden EPF Rules Employee Provident Fund

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10 hidden EPF Rules Employee Provident Fundby Manish Chauhan 1,127 comments

We will discuss few EPF rules today. We all know what is EPF Employee Provident Fund. A small part of your salary (12% of your basic salary) isinvested in something called EPF and an equal amount is matched by your employer each month. This is what 95% people know about EPF. Butthere are many things in EPF which a lot of people dont know and this article is going to open some not known secrets of EPF. One should be awareabout all the EPF related information. So lets take them one by one in points format.

1: You can also nominate someone for your EPF

Do you know that there is also nomination facility in EPF. The nominee will be contacted at the time of death of the person and handed over theEPF money. However if nomination is not present (which you should check), it can raise to all sort of issues while claiming money. There is a formcalled Form 2 which has to be filled to change or update the nomination. Please contact your company finance department or directly send the formto EPFO. One very strange about EPF rules is that you cant nominate your brother for EPF. Not sure why!

2: One can get pension under EPF

Do you know that there are two elements in EPF one is called EPF and other is EPS (You can check your EPF balance using the new EPF e-passbook option) . The EPF is actually for your provided fund and EPS is for your pension. The 12% contribution from your side goes to EPF, but the12% contribution which your employer makes, out of that 8.33% actually goes in EPS (subject to maximum of Rs 541) and the rest goes into EPF. Sounderstand it this way, a part of your employer contribution actually makes up your pension corpus. But there are some caveats to this.

One is liable for pension only if one has completed the age of 58.One is liable for pension only if he has completed 10 yrs of service (in case of more than one companies, the EPF should have been transferred,not withdrawn)The maximum Pension per month is subject to maximum of Rs 3,250 per month.Lifelong pension is available to the member and upon his death members of the family are entitled for the pension.

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3: No interest is given on EPS (pension part)

You must be thinking that you regularly get compound interest each year on your contribution + employer contribution. But it does not work like that.The compound interest is provided only on EPF part. The EPS part (8.33% out of 12% contribution from your employer or Rs 541 what ever isminimum) does not get any interest. At the time of EPF withdrawal , you get both EPF and EPS.

4: You might not get 100% of your EPF money

Imagine your contribution + employer contribution has been total Rs 3,50,000 till date. Out of this 3,50,000 , suppose 2,50,000 has gone in EPF , andrest 1,00,000 has gone in EPS (for pension) . Now if you quit your job in 6th year of employment and opt for withdrawal of your EPF money (EPF +EPS actually) , then do you think you will get total 3,50,000 . NO !

Thats because you always get 100% of your EPF part, but for EPS there is separate rule . There is something called Table D , under which itsmentioned how much you get at the time of exit from your job, there is a slab for each completed year and you get n times of your last drawn salary(depending on the completed year of service) subject to maximum to Rs 6,500 per month. So if your salary in this case was Rs 30,000 per month, stillyou will be given only 6,500 * 6.40 = Rs 41,600.

Note that the table D is upto 9 yrs only, because if 10 yrs are crossed, then you are liable for pension.

5: You can invest more in EPF, its called VPF

You can always invest more than 12% of your basic salary in EPF which is called VPF. In this case the excess amount will be invested in EPF andyou will keep on getting the interest, but the employer is not suppose to match your contribution. He will just invest upto maximum of 12% of yourbasic, not more than that.

6: Withdrawing of EPF amount at job change is illegal

Almost every one thinks that withdrawing of your EPF amount after a job switch is totally fine and allowed, however as per EPF Rules, its illegal.You can only withdraw your Employee provident fund money, only if you have no job at the time of withdrawing EPF and if 2 months have passed.Only transfer is allowed in case you get a new job and you switch to it. While there are no cases where EPF office tracks these things and takes upthis matter, still just for your information you should know that if you got a new job and took it and then you are applying for withdrawal, its illegalas per law. However in case of EPS, if the service period is less than 10 years, youve option to either withdraw your corpus or get it transferred by



obtaining a Scheme Certificate. Once, the service period crosses 10 years, the withdrawal option ceases. Just for your information, you canwithdraw your EPF money without the help of past employer signature by attesting your withdrawal form by a bank manager or some gazzetedofficer. I hope you are clear about EPF withdrawal rules.

7: One can opt out of EPF if he wants

Yes!I know this might be a surprising fact for many , but if ones basic salary per month is more than Rs 6,500, he has an option to opt out of EPFand not be part of it. In which case he will get all his salary in hand (without anything deducted every month). But the sad part is that one has to optout of EPF in the start of his job. If a person has been part of EPF even once in his life, then he cant opt out of it. So if you have already had EPF inyour life. This option is not for you, but if you are new to job and your EPF account number still does not exist, you can tell your employer that youdont want to be part of Employee provident fund . You will have to fill up form 11 for this.

8: Your EPF gives you some life insurance too

A lot of people might not know that in case a company is not providing group life insurance cover to its employees, in that case the employee is givena small life cover through EPF. This is because there is something called Employees Deposit Linked Insurance (EDLI) scheme and your organisationhas to contribute 0.5% of your monthly basic pay, capped at Rs 6,500, as premium for your life cover. However companies which already have lifeinsurance benefits to employees as part of the company, are exempted from this EDLI scheme. The bad part of this EDLI scheme is that the life coverunder this option is very low and thats maximum amount of Rs. 60,000. While this is peanuts for most of the people in big cities. For employees insmall scale industries and small cities, this amount of Rs 60,000 will still count something.

9: You can use EPF money can be withdrawn at special occasions

So now you know that EPF withdrawal is not permitted if you are still working. But there are occasions when Employee provident fund withdrawal isallowed. While you cannot withdraw it fully, you can withdraw a partial amount. Following is a list of events when you can withdraw the EPFamount and the conditions you need to fulfill

1. Marriage or education of self, children or siblings

- You should have completed a minimum of seven years of service. The maximum amount you can draw is 50% of your contribution You can avail of it three times in your working life. You will have to submit the wedding invite or a certified copy of the fee payable.

2. Medical treatment for Self or family (spouse, children, dependent parents)

- For major surgical operations or for TB, leprosy, paralysis, cancer, mental or heart ailments The maximum amount you can draw is 6 times your salar You must show proof of hospitalization for one month or more with leave certificate for that period from your employer.

3. Repay a housing loan for a house in the name of self, spouse or owned jointly

- You should have completed at least 10 years of service. You are eligible to withdraw an amount that is up to 36 times your wages.

4. Alterations/repairs to an existing home for house in the name of self, spouse or jointly

- You need a minimum service of five years (10 years for repairs) after the house was built/bought. You can draw up to 12 times the wages, only once.

5. Construction or purchase of house or flat/site or plot for self or spouse or joint ownership

- You should have completed at least five years of service. The maximum amount you can avail of is 36 times your wages. To buy a site or plot, the amount is 24 times your salary. Can be avail of it just once during the entire service.

10: You can file an RTI application for EPF issues

Did you know that you can file an RTI applicable to get any kind of information regarding your EPF. You can file it if you are facing issues like noclarity about balance in your EPF, no action taken for your EPF withdrawal or transfer. To find out information about other issues on EPF. I havedone a detailed post on how to file an RTI for your EPF issue.

Conclusion on EPF rules

The overall Employee provident fund rules are too complicated and very old. A common man does not know all these EPF rules, but knowing theseminimum 10 EPF rules will help him in his financial life.

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Add a comment 150 comments

Akhilesh Teri Top Commenter Delhi, IndiaHiI have a question about form 11.Lets say I was working in Company A drawing a salary of Rs. 5000. Henece, it wascompulsory for PF to be deducted. I leave the job and join Company B, where i draw asalary of 6000(i.e. still less than Rs. 6500), can I still use form 11 and be exempted fromPF Deduction? Or do I have to draw a salary higher than 6500 to be eligible for exemption from PF using



Or do I have to draw a salary higher than 6500 to be eligible for exemption from PF usingform 11.Please note that "salary" in the question means Basic plus DAAlso, please assume that salary is in respect of the period when ceiling amount was Rs.6500.Please reply ASAP as I need this for audit purposes.Reply Like October 27 at 8:46am

Gaurav Tripathi Digital Media Consultant at Nishkrant Media (P) Ltd 116 followersManish Chauhan Hi Manish,Im in It sector last 4 years ,My salary is above 3L/annum.Butnot any single company offer me PF or any other epf type of scheme...I want to engagewith Govt pf scheme..So what should i do??

Some times i asked HR but she told there is not any pf scheme..

So what can i do???Please suggest me iam very much interested to INDULGED into PFscheme...Reply Like September 15 at 2:45am

Sunita Baranwal Vtu belgaumI had withdrawn the PF amount for purchasing house from a builder A, but due to somedispute I had to discontinue and invest in another house with builder B. Now myorganization is asking me to repay the PF money with interest saying it was not used forthe purpose PF withdrawal was approved for. Please suggest me a way out. I donot havethat much cash to pay back as I am aleady paying for the House loans.Reply Like September 5 at 11:14am

Raghavendra Kamath Team Leader / Operations at Allsec Technologies Ltd.Hi I am trying to get a loan using partial withdrawal and my total Pf comes to 4 lakhs..can itake this entire amount and also what would be my pension which i would get ...mypension funds is 14066 till dateReply Like September 5 at 6:22pm

Sourabh Raghav Rana Top Commenter Head of Search Marketing - SEO / SEM atFreeKaaMaalMy company is deducting employee & employer PF contribution from my total per monthsalary. I read somewhere that supreme court issued a order that if someone's basicsalary more than rs 6500 he/she have choice not to deduct PF from his/her salary.

Is this true ?

Currently my company is deducting near about 5800rs provident fund from my salary.Can I ask to my company not to deduct PF from my salary & I wanna to utilize this moneyfor other purposes.Reply Like June 11 at 1:59am

Kislay Kashyap Assistant Professor at Working with NIFT Patna as Assistant ProfessorHi Manish, Thanks a lot for the very informative article . My previous company is closedand not in existence anymore. i quit the company in the Feb of 2008, six years back, afterworking for a little less than a year. how can i transfer my amount to my new account asthere is no one to tell me the EPF account number with the previous employee.Reply Like March 8 at 3:19am3

Manish Chauhan Author and Founder at Jagoinvestor 1,342 followersIts one mistake you did that you didnt note down your EPF number, now youwill face delay and some problem in getting it, first you need to find out yourcompany Establishment number from your company name and address andthen you need to file a RTI to find out your EPF by giving details about yourcompany !Reply Like March 12 at 11:47pm

Bigul ChughYou can also get your EPF number from the salary slip, if they are giving it toyou... most of the time, salary slip has the EPF account number on it.Reply Like August 14 at 7:33am

Hatim Ali Motiwala CTAE,UdaipurHi Manish,have one query i served 5 years in one company.Now i have swtiched toanother firm.If i transfer my PF will i be able to withdraw it from the second firm aftercompleting 1 year of service or when i withdraw will tax be deducted since i completedonly 1 year in present company but before that i m already 5 years into service and didnot withdraw PF once also.Can you please clarify ?Reply Like March 20 at 11:33am

Manish Chauhan Author and Founder at Jagoinvestor 1,342 followersIf you are into JOB, you cant withdraw EPF , you can only do that when youare unemployed ! Reply Like March 26 at 8:19pm

Gaurav Tripathi Digital Media Consultant at Nishkrant Media (P) Ltd 116



{ 1124 comments read them below or add one }

1 Sathish May 14, 2012 at 10:14 am

Nice and informative. Particularly the loan for house/flat/plot purchase which I was not aware at all!

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2 NARAYANAN May 14, 2012 at 11:12 am

Dear Manish,

very nice article. True, very few no the rules of EPF. I have withdrawn twice after 9 years in two companies. I collected the money andused. Never thought of finding how much it is or as the govt given the full money etc.

Small clarification. You mention that EPS CAN BE WITHDRAWN ONLY AT AGE 58. does that mean that i can make a claim at age58 ?

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3 Manish Chauhan May 14, 2012 at 6:04 pm

Narayanan

No , mostly you got your EPS also when you withdrew !

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4 NARAYANAN May 14, 2012 at 6:09 pm

Thanks Manish.

View 66 more

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Gaurav Tripathi Digital Media Consultant at Nishkrant Media (P) Ltd 116followersManish Chauhan Hi Manish,Im in It sector last 4 years ,My salary is above3L/annum.But not any single company offer me PF or any other epf type ofscheme...I want to engage with Govt pf scheme..So what should i do??

Some times i asked HR but she told there is not any pf scheme..

So what can i do???Please suggest me iam very much interested toINDULGED into PF scheme...Reply Like September 15 at 2:45am

Arun Seshadri Works at Cisco Systemswhere can i check the EPS accumulation. Say, an individual has changed jobs and PFwas transferred from one company to another.Reply Like September 17, 2013 at 5:42am4

Manish Chauhan Author and Founder at Jagoinvestor 1,342 followersYou will have to file a RTI to EPFO to know this, this will be safest optionReply Like September 17, 2013 at 8:53pm

Venkata Suresh Gamidi Apsp high schoolSir, I am Suresh, till now my pension fund is 38384. I have worked for 7 years and 10months. If i quit now, how much % of pension fund will I get?Reply Like December 20, 2013 at 3:47am

Manish Chauhan Author and Founder at Jagoinvestor 1,342 followersWhich pension fund are you talking about ?Reply Like December 24, 2013 at 11:07pm

Satish Pahuja GM at HOTEL LE GEMThanks for the informations. It shall be a great help for many. I have a Q. too. I also gotone transfer from previous a/c to current organisation. How can I check that whether I gotepf and eps Transferred or not.Reply Like April 30, 2013 at 6:32am3

Manish Chauhan Author and Founder at Jagoinvestor 1,342 followersDilawar Singh File RTI !Reply Like May 6, 2013 at 2:59am



Keep up this good job.

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Now you can take use of it !

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6 suman malik November 15, 2012 at 2:13 pm

Currently I am not working in any organisation . But I want to continue my contribution in my Last Companys EPF account. can Icontinue, If yes. Please tell the procedure

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7 Manish Chauhan November 15, 2012 at 7:12 pm

No you cant , you can only invest in current company EPF !

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8 rocky December 23, 2012 at 10:20 am

Hi Manish,

Sincerely appreciate you for the article.

I work for a IT company and it has laid of 500 people including me. Now, until we find a new job it might take 1 month to 6months. I do not want to withdraw the money in PF (which is locally maintained) but would like to transfer after getting a new job.But the current company is insisting that we should give a written-form in advance for withdrawl of the PF money. In case we donot get a job in two months or transfer to a new account the letter gets activated and they would send the cheque for the PF money.This they are doing to avoid paying the interest. The question I have are1. Is there a rule that they must keep the money atleast for 3 years ?2. Is there a possibility that I can keep the money with them (without getting interest)?3. Is it possible to transfer the money from EPF to a PPF (which I already have)?

thanks again.Rocky

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9 Manish Chauhan December 24, 2012 at 9:51 am

1. I am not sure about the private EPF which is maintained by company , so cant comment on that

2. This should be possible, because there are many people I hear have their EPF with their company

3. There is no relation between EPF and PPF .

Manish

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10 Ankur May 14, 2012 at 10:23 am

Manish Thanks much for this post!!!! EPF and EPS clarification was very very helpful.

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Thanks Ankur what else did you learn from post !

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12 Arun May 14, 2012 at 10:31 am

Very useful information. Thanks a lot sir.

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Thanks Arun !

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14 Ronak May 14, 2012 at 10:36 am

Nice read, Manish. Very informative. Keep up the good work.

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Thanks Ronak !

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16 Rachit May 14, 2012 at 10:41 am

A very good and informative article. Keep posting more.. PPF, Health insurance, Stocks, MF etc.

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SUre

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18 Siva Mohan May 14, 2012 at 10:43 am

Hi Manish,

Thanks for a very informative article. I have a query.

I have not transferred or withdrawn EPF from my first employer where I worked for 2 years until 2009. I didnt bother withdrawing as I am notin need of EPF money.

What should I do now.. transfer it to my current employers EPF account or withdraw it?

Thanks,Siva Mohan

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19 Kranti Goyal May 14, 2012 at 10:57 am

Hi,

As per current rule, In EPF if money is not deposited for continuous 3 years then account status changes to be dormant and no interestwill be pay in future.

Manish you can also add this to article.

Thanks and RegardKranti Goyal

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Thats a good point , but I think a lot of people might know this

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Siva

You need to fill up form 13 and apply for transfer , after 6 months of doing so if you dont see any progress , then file RTI and get moreinfo on that http://www.jagoinvestor.com/2012/03/rti-for-epf-withdrawal-or-transfer.html

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22 Siva Mohan May 15, 2012 at 10:30 am



Thank you very much for the reply Kranti & Manish.

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23 Santosh Prasad May 15, 2012 at 12:47 pm

Manish,One should not wait till 6 months after submitting form-13. EPF offices are computerized now and they are supposed to getit done within 30 days(ideally). Hence after 30 days, one can file an RTI application to know about the status of transferrequest.

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24 Krishna May 14, 2012 at 10:49 am

Hi Manish,It was an eye opener when it comes to using your EPF for house/plot purchase. Should I repay it in case of partial withdrawl for marriage /purchase of plot/flat. And if yes is there any interest associated with it

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Krishna

Its not a loan , its a partial withdrawal , so no point of interst !

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26 Sharat Trehan May 14, 2012 at 10:51 am

At the end you have written that you have done a detailed post on how to file an RTI on EPF issues. Can you possibly mail that link? Regards,Sharat

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27 Vishnu Agarwal May 14, 2012 at 12:06 pm

Hi Sharat,Please go thru the following links posted earlier:

http://www.jagoinvestor.com/2012/03/rti-for-epf-withdrawal-or-transfer.htmlhttp://www.jagoinvestor.com/forum/how-to-apply-for-rti/1957/

Please follow up the blog by signing up thru email at top left box in the page for the future blog updates.

Regards,Vishnu Agarwal

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28 Sharat Trehan May 14, 2012 at 1:26 pm

Dear Vishnu,

Thanks for the prompt reply and the useful links.

Regards

Sharat

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29 Kapil May 14, 2012 at 12:32 pm

There you go http://www.jagoinvestor.com/2012/03/rti-for-epf-withdrawal-or-transfer.html

Manish you may want to add the link to the article

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Done Kapil !



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http://www.jagoinvestor.com/2012/03/rti-for-epf-withdrawal-or-transfer.html

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32 Dhanesh Chakraborty May 14, 2012 at 10:51 am

I worked in a private company for 10 years.. but not got any penson even not received full PF..can I have any suggestion for recoverning forpending pfRegardsDhaneshChakraborty941126067

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33 Anurag May 14, 2012 at 1:39 pm

Hi,Pension starts after 58 yrs age of applicant not immediately. You need to interact with EPF commissioner office to get the details andreply when you reach 58 yrs of age.Rgds,

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Actually it can start after 52 yrs also subject to some resitriction and condition

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You need to be above 58 age , to get get pension , If you have applied for withdrawal , then you must have got the EPS money too .. useRTI to know more about it http://www.jagoinvestor.com/2012/03/rti-for-epf-withdrawal-or-transfer.html

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36 Rachit May 14, 2012 at 10:52 am

A few queries:

1. As EPS is 8.33% then let say that amount for an individual crosses Rs 541 then where the rest of the money will go.e.g. EE Contribution: 2000 Rs /month ER contribution: 2000 Rs/ Month Now 2/3 of 2000 Rs of ER will go for Pension which is almost like1334 Rs but as maximum limit is 541 Rs / Month then 1334-541 = 793 Rs, where wil it go?

2. Will the compounding interest be given in baove example on: 2000 + 666 = 2666 rs OR on: 2000 + 666 + 793 = 3459 Rs

Thanks

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37 Vishnu Agarwal May 14, 2012 at 12:11 pm

In my case only 541 is deposited for EPS. Rest of Employer contribution & EPF I can see in my account, and elegible to withdraw as perthe conditions.

So the extra money goes into EPF account only.

Regards,Vishnu Agarwal

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38 Paddu May 14, 2012 at 1:32 pm

2000-541 EDLI if applicable = 1459 EDLI if applicable, will go to EPF.

[I noticed the discrepancy between Employee/er's contributions in my EPF account statement (that I always get 2 years(!) after the end ofthe financial year), researched epfindia.nic.in & found about EPS & EDIL and I'm answering based on my EPF statement & thatwebsite.]

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Rachit

If EPS thing crosses 541 , then rest will go in EPF only , EPF earns interst , EPS does not !

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40 Poonam May 14, 2012 at 11:06 am

Very useful information. Thanks.

Regards,Poonam.

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Thanks Poonam

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42 Srini November 4, 2012 at 12:43 am

Dear Manish I have total 14 years of IT experiance. I have been working with current employer about 8.4 years. I have housingloan of 15Lacs. Can I withdraw my PF completely to pay housing loan. This PF acct opened 8.4 years ago. I have closed my oldemployer PF acct as it is not govt one, its a trust.

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43 Manish Chauhan November 6, 2012 at 4:31 pm

I dont think you can completely withdraw it , look at the article end once again on the limit .

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44 Pro Money Investor May 14, 2012 at 11:07 am

In many private organizations,the owners prefer collecting even their contribution from the staff salary and it is obvious that the employees cannot raise their voice so that their job itself will be at stake.

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Pro

Thats part of CTC .. Nothing wrong in it . They can always tell you CTC less and then add their contribution , rather they tell you in CTC. Whats wrong in that ?

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46 Santosh Prasad May 15, 2012 at 12:53 pm

Employer contribution of 12% of basic salary is part of en employees CTC. Because, whatever employer is contributing, getsdeposited in employees name and he/she is complete owner of this amount.

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47 Amol May 14, 2012 at 11:10 am

Dear Manish,

Very Informative artcile about EPF and EPS. I have been working from last five years and was not aware of this one. Thanks!as You said withdrawing EPF is illegal and we should map existing EPF with New Company, I found that we need to take a lot of followupdoing those things. I heard from one of my friend that his earlier company did not cooperated in doing so and he has to travel many time forthat. same about EPF office. Do we have facility to transfer EPF account online?

FYI. In your Diagram you have repeated Employees Contibution instead of Employers. may be a typo:-)

Regards,Amol

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48 Paddu May 14, 2012 at 2:30 pm

What I hear is that if your earlier companys EPF is managed by private trustees it should be easy to transfer (they might even haveonline transfer?).

But if it is managed by the EPF organisation (http://epfindia.nic.in), you know how difficult it is to get work done in govt. offices! Asother people have said, file an RTI to get the transfer done!

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Might be . I am not sure if private trustees are more efficient !

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Amol

Withdrawing is illegal if you are still employed , if you are really not having any job , you can withdraw it . Employer;s will just fill upyour form and start the process , after that they are not suppose to and will not follow up , its not their work and not their responsibility ,they are right in saying so , its between you and govt now .

File RTI , it works in all situation : http://www.jagoinvestor.com/2012/03/rti-for-epf-withdrawal-or-transfer.html

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51 sri May 14, 2012 at 11:13 am

manish,

i think there are different PF schemesam not clear about of pension and provident fund linkagecan you elaborate more mentioning thesource of info please. EPS is different scheme but for PF employes has to contribute basic 8.33% and it has to be be clubbed with employeescontribution.

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Sri

What are you confused about . EPS is an internal thing in EPF , you can see the graph which i made and posted above

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53 Pranav May 14, 2012 at 11:14 am

Thanks for sharing..

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54 Kshitij May 14, 2012 at 11:23 am

I have a query (not able to post in the forum):

I was working from Feb 2004 to Jan 2008 in Satyam, Hyderabad. I want to withdraw my PF (as I have been advised that transfer will takeages). They have given me a affidavit as it is 3+ years since I have left that job.

So will my withdrawal be taxable (considering that if you withdraw before completing 5 years you get 30% taxed)?

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55 Paddu May 14, 2012 at 1:42 pm

First withdrawing while having a job is illegal. Now, if you have no job and withdraw the amount before 5 years elaborate calculation isto be carried out according to the IT Act Fourth Schedule (http://law.incometaxindia.gov.in/DIT/HtmlFileProcess.aspx?FooterPath=D:\WebSites\DITTaxmann\Act2010\DirectTaxLaws\ITACT\HTMLFiles\2011&DFile=schedule4.htm) Rule 9:(i) for each of the previous years including the year of withdrawal tax benefit due to EPF has to be removed & tax recalculated,(ii) the difference between the recalculated tax and tax actually paid in all these years will be the tax on withdrawal.

As per Rule 10 the tax has to be deducted at source before giving you the money, but I heard that usually they only deduct 10% of thetax!

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56 Paddu May 14, 2012 at 1:42 pm

Oops! Please read 10% of the tax as 10% of the withdrawal amount as tax.

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Thats really a good idea .. will you be able to give an example using some figures !

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58 Paddu June 14, 2012 at 10:03 pm

I have only read those portions of the Income Tax Act. I am not even sure what all are to be included as tax benefit due toEPF since there is an employers contribution as well, etc. so cant give an example with figures.

Hope some or the other CA knows how this calculation is supposed to be done!

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Yes .. you will be taxed and its not 30% , its actually added to your income and then taxed as per your slab

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60 Kshitij May 15, 2012 at 10:16 pm

Thanks Paddu and Manish,

Currently I do not have a job. So I guess Id better make that affidavit and fill across.

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61 Umesh Dwivedi May 14, 2012 at 11:24 am

hello ;

I did a job in a Pvt company for two years, and i have left the job from last six months.Till i dont get a job , is it possible to withdraw myEPF.What is the procedure,plz tell me.

Thanks.

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Yes . its possible ,you just need to follow this http://www.jagoinvestor.com/forum/procedure-to-withdraw-epf/1011/

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63 jake May 14, 2012 at 11:24 am

Nice Article Manish, this is really informative. I would like to ask one question here. I have my previous PF account which is dormant now.How do I transfer the money from that dormant account to my present PF account?

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Jake

You need to follow the procedure for transfer of EPF Fill form 13 http://www.thinkplaninvest.com/2009/02/epf-pf-transfer-and-form-13/

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65 Ganesh Balasundaram May 14, 2012 at 11:25 am

The bottom portion in the embedded figure should indicate Employer.

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Changed !

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67 Sylvestor May 14, 2012 at 11:29 am

Nice Article.More clarity is needed how pension is calculated after 58 yrs of age.

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68 PATHY May 14, 2012 at 11:52 am

Hi MANISH GOOD INFORMATION CLARITY ON PENSION CALCULATION AFTER 58 YRS

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Pathy

Please post your questions in simple words !

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Sylvestor

Here is the reference

Under Employees Pension Scheme, the monthly retiring pension is decided on the basis of Pensionable Service and PensionableSalary and is worked out as follows

Monthly pension=( Pensionable salary*Pensionable service)/70

Pensionable Salary is arrived at by considering the average contributing salary immediately preceding 12 months from the date of exitfrom the scheme, normally this would be limited to Rs 6,500 p.m. unless certain enhanced contributions are made by the employer withpermission. Pensionable Service is the service in years rendered by the member for which contributions have been received maximumcannot exceed 35 years

Reference : http://www.bemoneyaware.com/blog/epf/

You can also see this article : http://www.citehr.com/74122-pension-calculator-under-epf-scheme.html

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71 Shrenik May 14, 2012 at 11:43 am

Hi Manish,

Once again very informative and useful article from your side.

Here it is mentioned that One is liable for pension only if he has completed 10 yrs of service (in case of more than one companies, the EPFshould have been transferred, not withdrawn)The maximum Pension per month is subject to maximum of Rs 3,250 per month.

I have completed 09 years of service in one company. can you pls also elaborate on what basis amount of pension is being decided and after ayear (when I complete 10 years) is it worth for me to apply for pension or I can do that any time after completing 10 years ? Which one willgive more advantage?

Once again thanks for nice and article.

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You also need to complete 58 yrs of age ! .. So if you have completed 10 yrs of service , but not of 58 yrs ,still you need to wait forpension

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73 Shrenik May 16, 2012 at 4:40 pm



Thnx Manish

can you pls also elaborate on what basis amount of pension is being decided.

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Under Employees Pension Scheme, the monthly retiring pension is decided on the basis of Pensionable Service andPensionable Salary and is worked out as follows

Monthly pension=( Pensionable salary*Pensionable service)/70

Pensionable Salary is arrived at by considering the average contributing salary immediately preceding 12 months from thedate of exit from the scheme, normally this would be limited to Rs 6,500 p.m. unless certain enhanced contributions aremade by the employer with permission. Pensionable Service is the service in years rendered by the member for whichcontributions have been received maximum cannot exceed 35 years

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75 Shrenik May 17, 2012 at 3:30 pm

Thnx Manish.it is really useful.

May I request you to cover other useful topics like Gratuity for ours better understanding.

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76 Manish Chauhan May 18, 2012 at 9:21 am

Will do that soon

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77 SHYAM May 14, 2012 at 11:44 am

Dear Manish,

Very -2 usefull information.

I have a query that my basic salary is 6500.00 and my total contribution is for 20 year How much pension amount i will get on retirement.

Thanks

Shyam

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Shaym

There can be changes in between .. You can search more on the formula on EPF pension calcualtion

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79 Deep Vineet May 14, 2012 at 11:46 am

Nice Article Manish, will it be possible for you to add the information about the calculation of interest part, also a calculator in excel would beof great help.

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Calculation of Interest ?

Its a normal way of yearly compound interest . With 8.5% , 100 becomre 108.5 at the end of year .. and then again 8.5% of 108.5 isadded back so on

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81 Anurag May 14, 2012 at 11:52 am

Hi Manish,



What is the procedure to be followed for transfer of EPF Account when switching jobs. I just received a statement from my Company regardingmy EPF Balance but isnt there any way so that I can check it myself online like some account number.

Thanks

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Anurag

You can follow these

http://www.rtiindia.org/forum/19466-how-withdraw-pf-without-signing-previous-employer.htmlhttp://www.jagoinvestor.com/forum/epf-account-transfer-issue/2892/http://www.jagoinvestor.com/forum/transfer-of-epf-account/234/

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83 Vishnu Agarwal May 14, 2012 at 11:53 am

Hi Manish,Again you surprised us with such a detailed information.

Further, Ive few questions, if you can help:1. Ive worked in 3 years in one company, and transfer to other, where further worked completing total 6 years. As funds are transferred fromDelhi to Bangalore, PF account number is also changed. Than, what is the life of PF (Table D)?

2. If I want to decrease the PF contribution from 12% to say 2%, is it possible? If it is, Is it dependent on company?

3. How to check the total EPS accumulate as I transferred my PF from previous employee to current, and raising query to epfindia is onlygiving me EPF & Emp contribution and telling me if EPS got transferred or not?

Thanks,Vishnu Agarwal

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84 Paddu May 14, 2012 at 2:46 pm

2. PF contribution has to be 12% of PF basic, period. However the PF basic can be declared to be anything between Rs. 6,500 p.m. andyour actual basic, in case your basic exceeds Rs. 6,500 p.m. Thus minimum PF is 12% of Rs. 6,500 p.m. = Rs. 780 p.m.

Now, my company was allowing this option until it got acquired and now the parent company doesnt give the option of declaring alower basic to EPF, so Im sure this is dependent on company.

3. Yeah, EPF account statement is totally silent on EPS. There seems to be no easy way of knowing the EPS balance. Proly need to filean RTI?

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Paddu

Yes .. It actually depends on the company that they want to take 6500 or your actual basic . But most of the companies take theactual numbers .

To get your EPS balance , follow this article : http://www.jagoinvestor.com/2012/02/epf-balance-status-online.html . You mightget the SMS and it will contact two numbers , the lower one is mostly your EPS . Else RTI is the sure shot tool for find all answers

Manish

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1. It would be 9 yrs (6+3) , because it was transfered .

2. No you cant do that. . 12% of basic is mandatory

3. Use RTI http://www.jagoinvestor.com/2012/03/rti-for-epf-withdrawal-or-transfer.html . Works faster , is a little pain to do !

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87 Sundeep Gupta May 14, 2012 at 12:19 pm

Hi Manish,

1. I requested for transfer of my EPF from my previous 2 organisations to my current organisation. This was done in Aug 2011, and I have noupdates so far. My employer say they do not follow up on this. How can I get the information / status of my transfer request.

2. Given that I requested for transfer in aug 2011 and there is no action on that yet, can I opt for withdrawl from my previous EPF account(knowing that its illegal) ?

3. This is a general question. Assuming a person is no longer working and has withdrawn his PF and all his EPF accounts are closed. And aftersay 1year he plans to join a job. Can he/she fill form 11 and opt out of the EPF contribution (Given basic is > 6500)

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Sundeep

1. This happens all the time , its just few months as of now and your delay is below average . But you can now file an RTI and findhow why is it stuck , do this : http://www.jagoinvestor.com/2012/03/rti-for-epf-withdrawal-or-transfer.html

2. Yes mostly you can do that, use RTI again in this case .

3. This is tricky , but as per the wordings in the rule of EPF If a person has earliar been part of EPF , then he cant opt out of it , Iwould say NO

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89 Nita May 14, 2012 at 12:21 pm

Very nice article manish. I was not aware about the pension one can get under EPF

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Yes .. Most of the people dont know because we never see someone sticking to a job for 10 yrs or so !

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91 ravindra May 14, 2012 at 12:21 pm

Thanks, for information gate Rs.3500 maximum limit EPF pension & How to caculate EPF pension

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Welcome !

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93 Koganti Srinivasa Rao May 14, 2012 at 12:46 pm

I am 42 years old. If I want to a get a monthly pension of Rs 15000 per month from my 60th year, how much I have to invest per year and howmany years. Please, let me know which is the best pension plan and insurance company.

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Koganti

In this case EPF will not be useful because one can not get 15000 per month in EPF , its limited to 3-4k only as you can read about . Toget 15000 per month , all you need is 20 lacs and investing in something giving 10% per annum , I think you should focus right now ongrowing your wealth , so just do SIP in mutual funds , after 18 yrs , when you are at 60 , there will be plenty of ways of doing it !

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95 SURESAN RAJA May 14, 2012 at 1:01 pm

Mr.Manish, You are great for giving this another good blog.

I need some more clarification of the following:



5. Construction or purchase of house or flat/site or plot for self or spouse or joint ownership

You should have completed at least five years of service. The maximum amount you can avail of is 36 times your wages. To buy a site or plot, the amount is 24 times your salary. Can be avail of it just once during the entire service.

If my gross salary is 40000 p.m. then I will be eligible for Rs.144000/- or it is calculating basic pay i.e. suppose Rs.18000/- then I will beeligible for Rs.648000/-. My service balance is only for 7 years. Is there any terms to link with available EPF/EPS amount to sanction theadvance? What will be the interest? I heard that it is 2% p.a.

Please clarify sir,

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96 SURESAN RAJA May 14, 2012 at 1:03 pm

In my earlier comments please read Rs.1440000/- instead of Rs.140000/-Regards,

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Suresan

The first thing is that you are not getting any LOAN , you are actually getting your own money from EPF , its partial withdrawal here .

Next thing is that it will be 36 X BASIC Salary , because there can be two different people with same basic but different take home . Soit does not make sense to assume take home salary or gross salary . Its basic !

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98 SURESAN RAJA May 15, 2012 at 9:59 am

Thanks sir. But a doubt that if the calculation for 36xBasic goes to Rs.6,48,000/- where as I got the SMS through online PFbalance is only Rs.2,00,000/-. So how much I will get whether it is 6.48 lacs or 80% of the PF balance of Rs. 2 lacs? Regards,

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Better enquire using RTI

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100 Sandip May 14, 2012 at 1:04 pm

Dear Manish, thanks for nice informative article. I want to know one thing thatwhen any EPF loan is due then can anyone repay and takeanother loan in the same financial year or not?

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I am not sure what exactly is your question . What is meant by EPF loan ?

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I think he meant for the EPF Loan is the EPF advance we can take for different reasons i.e. for contruction/purchase offlat/house/land, education, marriage, medical etc. For some of the reason above can take advance only one time eg. we can take 80to 90% our EPF balance for the custruction/purchase of flat/house/land only one time in the life. We have to submit the possessioncertificate within a year. If we use the money to any other purpose then it will recover in lumsum or from salary with interest @2% p.a.

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103 PATEL BHAVESH May 14, 2012 at 1:31 pm

Very nice.Thank u very much for updating as its very helpful in our life as far as fro the serviceman and women.

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Welcome Bhavesh

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105 Bishal May 14, 2012 at 2:19 pm

Hi, does this elf information apply only in India or other countries too? Thanks.

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Its only for India

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107 Bishal May 14, 2012 at 2:20 pm

Sorry, I meant EPF and EPS.

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108 Roshni Nayak May 14, 2012 at 2:26 pm

Hi Manish,

Nice article, you can add 2 more points here,

1. No interest will be credited in the EPF acount which are lying dormant for 3 years or more. This is with effect from April 1,2011.2. If you withdraw EPF money before five years, it will be taxed.

Regards,Roshni

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Thanks for those points Rashmi

I considered them to be more known points actually .. But those are points many people would not know about !

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110 Charu Gupta May 14, 2012 at 3:06 pm

Manish,

A very very useful information, especially point 6 and 10. I had been looking for this information from a loong loong time and here you are,heard it and fulfilled it!

Thanks a lot. Btw, though Ill go through you post on how to file for your EPF information, just wanted to know what can I do if my previousemployer is not able to retrieve my EPF account information and details. If my current employer has to contirbute to my EPF, how can they doso when I dont even know my EPF account number?

Charu!

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Charu

When your new employer does not have your old EPF details , in that case they open a new EPF account on your name and you thenhave 2 EPF accounts . You can then choose to transfer your old EPF money to new EPF . You old Employer is not able to locate yourEPF account number also ? Just number ! ..

If you have the account number somewhere in old salary slips etc , you can then just fill up a form for transfer of your EPF to new EPF .Do use RTI if this does not happen fast (6 months)

Manish

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112 Charu Gupta May 17, 2012 at 11:24 am



Thanks a lot Manish for the valuable information

Is your EPF account not linked to your PAN? And do they not check if one person has multiple accounts or not? I mean how comethey allow for the same? Its just duplication!

It seems my old employer has misplaced the PF account numbers sheet of all them employees! Im after them to find it come whatmay and hoping that I should be able to get it soon. In case I dont, Ill definitely use RTI.

When I tried looking for it online, I did find the area code and company code. Do you think I can go to the office where our PFaccount was opened in Pune and request them to find my PF account number? Do you think there is any possibility this will help?

Charu

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Yes it can help , but the fastest and cheaper way is to file an RTI , use rtination.com if you feel lazy to go to post office tobuy postal orders

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114 Veeraf May 14, 2012 at 3:19 pm

Excellent article contents and presentation. I have not meet a single person in my life time who was able to explain in points EPF, EPS andVPS.

Best Regards,

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Good to hear that Veeraf ! thanks for appreciation . Teach to others now

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116 Satish May 14, 2012 at 4:29 pm

Thanks for posting the great information which many of us does not know. Keep posting similar information regularly

Dr.Satish (Hyderabad)

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Thanks Satish .. I hope you learnt some really new things which you were unaware of !

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118 Prakash Kumar September 24, 2013 at 6:36 pm

Hi Manish,

Really nice article, i was not aware about the Pension scheme at age of 58 Yrs.

Thanks,Prakash

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119 Manish Chauhan September 24, 2013 at 7:09 pm

Thanks

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120 Praveen May 14, 2012 at 5:16 pm

Hi Manish

Lets say i quit my job and withdraw my EPF.

What are the tax rules for this? Do i need to pay any tax on it?



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Praveen

If you have completed 5 yrs of service , then no tax ,else it will be added as your income and taxed as per your slab !

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122 Sushil May 14, 2012 at 5:27 pm

Manish Ji.Excellent Article once Again.though i knew much about EPF yet point no 3 and 4 are absolutely new for meThis information was indeedvery well

I am a regular visitor of your blog and now it has become my habit to visit it atleast once daily to check if anything new is therei am addict tojagoinvestor.compls keep it up

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Good to hear that Sushil .. keep it up

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124 C.R.KESAVAN May 14, 2012 at 6:05 pm

Manish,The article is a very good one. I did not know about the EPS part(8.33%) does not generate any interest. Employees who get12% of their actualbasic(instead of Rs780) will lose substantial amount of 8.33% of their employers contribution because of inflation & Zero interest. This isreally terrifying.

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Yes

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126 Anjan April 8, 2014 at 12:05 pm

Yes, it is indeed worrying that the EPS part which may grow to a substantial amount over the years does not earn any interest. This iscomplete waste and may be one of the reasons why monthly pension after 58 is restricted to only Rs.3540. This amount is alreadypeanuts, so just imagine what will happen 30 years later thanks to inflation.

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127 Manoj May 14, 2012 at 6:14 pm

Thanks for the info. I have one queryYou have mentioned Employee contribution can go beyond 12% of basic. Is there any cap on thiscontribution?

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No, there is no cap on this .. 100% of your Basic can go in EPF ..

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129 Pavan May 14, 2012 at 6:31 pm

HI Manish,

Many thanks for your post. My understanding of 4th point (4: You might not get 100% of your EPF money) is below.Assume monthly salary is 20834. His contribution towards EPS (subject to 541 per month is maximum) is 6492.He leaves job after 1 year and opts for withdrawal. The EPS he gets is 20834*1.02 (As per table D) = 21250.But this amount is more than the balance he has. Is this correct.

Also, if 10 yrs are crossed, then you are liable for pension Does this mean if he withdraws after 10 years he will get a pension? If Yes howis this calculated.



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Pavan

No . Your EPS is subject to Maximum the amount is there in EPS . So whatever is lower will be given to you . Another thing is thathere the salary is basic salary , not the gross

Also Pension will be given only once you are above age 58 yrs

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131 Pavan May 14, 2012 at 6:57 pm

Hi Manish,

Thanks.. I meant basic salary only since EPFO will only know our basic salary :).One more query..Do we need to give seperate application to transfer EPS or once we transfer EPF it will happen automatically ?

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It will not happen automatically .. Note that you fill form 19 for EPF withdrawal and form 10 C will be filled for EPS

Manish

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133 Vineet May 14, 2012 at 7:51 pm

Very nice and informative article as usual.

>>>Lifelong pension is available to the member and upon his death members of the family are entitled for the pension.

Till what time family members can get pension? Which family members get it? Only those which are nominee?

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134 Vineet May 14, 2012 at 7:53 pm

Another question what happens if person dies before reaching age 58. Are famliy members able to get pension in such case? If yes, tillwhat time will they continue to get pension?

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Vineet

Family can only get pension only when the pension was already on .If a person has not started pension, then his nominee will getthe EPS money in lumpsum

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136 anilkumar December 14, 2012 at 3:42 pm

if pension has started till wht time i get pension..incase death how many years my nominee wil get pension

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137 Manish Chauhan December 19, 2012 at 2:57 pm

Life time

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138 ganesh December 14, 2012 at 5:51 pm

Can u pls ratify the point no 4..It showing that only some amount of EPS will be granted..If employee is not worked in a tenyears..How he is liable for pension..You r telling that some 41600 rs granted..So where is rest of money

The amount you are showing is in EPS is 100000lakh..



So where is the rest of money if he is not liable for Pension how they get balance money.

The e.g your given which is incorrect..

If any employee is worked in organisation for 10 Years still they contribute to EPS amount is 541*10(120 months) years=64920 only

Can you please chge the amount of EPSAfter 10 years of completing EPS we are not eligible to withdrawn the amount..

Can you pls look into this.

If we are withdrwing EPF within 10 years we will get entire money

And the EPS scheme is not providing direct intrest but is giving in different way..As your point of view we can avail theintrest but we are getting somethhing extra only..

If employer invested 541* 9(108 months)years we will get only 58428 but as per Table D we are getting 64220Rs i.e we aregetting(0.88%) extra..compared to EPF we are getting less amount..

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139 Manish Chauhan December 19, 2012 at 2:56 pm

So what has to be changed ? Whats wrong in that ?

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Nominee will be handed over the money ,then it will move to legal heirs !

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141 Suresh Kr. Ray May 14, 2012 at 8:53 pm

Manishji,Once again the article is very relevant and informative. You have made known many hidden aspect of the EPF. One can seldom getthese hidden aspect of EPF anywhere. And Its Happens only In JAGOINVESTOR. THANX

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Thanks Suresh . Keep reading !

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143 Sachin May 14, 2012 at 11:14 pm

Hi Manish very useful information, thanks. I have one Q about VPF..

- You are eligible to withdraw an amount that is up to 36 times your wages.

How is VPF is calculated for withdraw?

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VPF is nothing but EPF only .. just that anything above 12% of your BASIC is labeled as VPF , but withdrawing rule is just same ..everything is EPF once the money is invested in that

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145 Sudhanshu May 15, 2012 at 12:30 am

Hi Manish,

What is the difference between PPF & EPF ? Can i have both accounts ? Also, please let me know about tax exemption, whether 70000 is forPPF or cumulatively for both PPF & EPF ?

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146 Manoj May 15, 2012 at 10:26 am

PPF Public Provident Fund, which is not linked with the emplyer and entirely voluntary for a person just like NSC, while EPF Is



linked with the employer as employer has to add 12% amount from his side. You can have both PPF & EPF A/Cs. The limit of Rs. 70000is increased to Rs. 100000 since last financial year & it is for PPF (not for EPF + PPF). You can have A/Cs for yourself, kid also. But thecumulative amount for you + kid should not exceed Rs. 100000.

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147 Viswa May 15, 2012 at 2:10 am

Very detailed and informative article.

Here is my question:I have worked in a company in India for 4 years and got transferred USA as an US employee for last 4 years. Since I didnt received any salaryin India for the past 4 years, there is no contribution to my EPF account also. So I think my EPF account would be dormant. Can I withdraw theEPF account or any other option is there.

Thanks.

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Viswa

Yes , you can now withdraw it . Fill up the form 13 for that

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149 Sukesh Choudhary May 15, 2012 at 2:42 am

Hi,

Nice article to go through.

One query regarding pension fund withdrwal, had joined company on 31-Dec-2010, left the organization on 31-Oct-2011, somewhere 10months service is there, had applied for EPF and FPF withdrawl after 3 months, got the EPF amount only, had queried the reason behind notgetting the pension fund; but still doesnt get any clarification for the same from the concerned person there.

Can you please update whether i will be eligible for the withdrwal of accumulated pension amount for 10 months service.

Thanks in advance.

Regards,

Sukesh

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Hmm.. if you see the article, as per table D ,the minimum service tenure should be 1 yr, but now its time you file an RTI application forthis issue

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151 Sukesh May 15, 2012 at 11:42 pm

In case, me notbeing eligible t withdraw pension fund, whats the use of file of RTI ???

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I said use RTI to find out the information . That what happens in case of 10 months of service . there should be some way forsure . You will get answer through RTI

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153 Sukesh Choudhary May 17, 2012 at 6:01 am

Thanks for your clarification in this regard.

Regards,

Sukesh



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Welcome

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155 Kannadasan May 15, 2012 at 7:18 am

Hey Manish,

there is a option like get a loan without interest instead of withdrawl a aprtial amount. is it true?.

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No , i have not heard about loan option

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There is no loan but advance against our EPF balance.

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158 Venkatesh May 15, 2012 at 9:18 am

Hi,

The information is very useful. These are very important for each individual. Very specific and to the point. Keep up the good work.

Thanks & regards,Venkatesh R

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Thanks Venkatesh

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160 Suresh K Narula May 15, 2012 at 10:41 am

Excellent Manish, but one fact is always missed while talking about EPF which is interest calculation. Every year, I get PF slip but I couldnever get right calculation of interest i.e. monthly compunded or yearly comounded. Please explore this fact.

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Suresh

I am not sure about it, but I think its just normal way .. Compound interest at the end of the year . Will try to find out more

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162 Sandeep June 7, 2012 at 12:14 pm

Hi,Please explore EPF interest calculation method adopted by EPFO .Compound interest at the end of the year method is not matching with the PF slips.Im searching nos. of sites and articles on thesubject matter,EPF Interest Calculators,Interest calculation Excel sheets etc. but not found the correct one which matches with PFslips provided by the EPFO.Can I get information through RTI.Please reply,Thanks

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163 JayaprakashReddy August 20, 2012 at 11:56 pm

I was in same impression as you. I found some interesting facts about EPF after speaking to my company CA. EPF interest



calculation is done from March-Feb, this is bit unusual compared to fin year april-march or calendar year Jan-Dec. Even Ifound all the online calculators are not matching with our PF slips because of this. You can do your own calculation byapplying interest starting from month March till Feb. I did that and it was exactly matching.

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164 Sandeep August 30, 2012 at 5:00 pm

Hi,Yes sir,I agree with you but if member withdraws any amount during the year then as per our calculations,EPFO isadopting a method by adjusting a month prior to actually amount withdrawn.Another fact that for contributiondeducted from Feb month salary/remuneration ,which has to be deposited in March,on that contribution no interest isbeing calculated.EPF interest calculation is done from March-Feb,because deduction from March month to be deposited in Aprilonly.Thanks for reply.Sandeep

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165 pari May 15, 2012 at 11:02 am

Very informative article!

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Thanks !

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167 Mehul Naik May 15, 2012 at 11:05 am

Very informative post Manish. Thanks!

My parents were both in government service and are now retired. They are getting regular pension. The EPS is in addition to the regularpension govt. employees get or is it included in the same?

Please reply. Thanks.

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Do they have EPF component . I think its in case of private salaried employees

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169 pophale May 15, 2012 at 11:10 am

Dear Manish,Excellent informative article.I am at the age of 60 and not yet getting pension.What can be done.will I get interest on delayed payment?

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No , you will have to apply for pension . Else you can withdraw it, but you need to take one action

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171 Neerav May 15, 2012 at 2:37 pm

This is regarding point 7. If a person leaves job and for 2 months he has no job then he can withdraw EPF. Now if he joins the new job does hehave the option of not being part of EPF (although he was a member before)?

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No , he does not have this option . He has been part of it once and now he has to be part of it .

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173 Neerav May 15, 2012 at 2:38 pm



Also regarding the nomination, I think after marriage one has to re-nominate.

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174 pophale May 16, 2012 at 10:36 am

Dear ManishThanks for your reply.I have already applied for pension by submitting documents through my company office.However, pension is not yetstarted.As usual no proper answers from govt. dept.Matter is under followup through my company official, being away from my residentialplace.Any quick remedial action is recommended by you.

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now you should take help of RTI , I am sure that you will get immediate replies . Follow this : http://www.jagoinvestor.com/2012/03/rti-for-epf-withdrawal-or-transfer.html

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176 Siddhant May 16, 2012 at 12:48 pm

Hi Manish,

one fact which is important is that The money withdrawn before 5 years in the PF scheme is Taxable in income tax at full rate.This can cause serious issues in personal income tax

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Yes .. I didnt put this point because a lot of people know this

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178 Ms Hyacinth May 16, 2012 at 4:16 pm

Hi Manish

Real good insight into EPF keep it UP!!

It would be good if you give some info on FPS also for people who have completed more than 20 years of service in an organisation.

thanks

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I have no idea on this FPS , what exactly is it ?

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180 munish May 16, 2012 at 4:39 pm

hello manish

i was an employee of an insurance co and i have worked for 1 year , nw after around 6 year i want to withdraw my PF but my account isdormant nw

Kindly confirm what is to be done in this case ????

Kindly revert

Munish

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You can withdraw the money , you can now submit form 19 for EPF withdrawal and also fill form 10-C for withdrawal of EPS

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182 Prasanna May 16, 2012 at 7:10 pm



Manish,I have the following query:

I started contributing to EPF since July 2005 in Company A. I changed job in July 2008 to Company B. I transferred EPF from Company A toCompany B.EPF amount got transferred properly and the EPF balance reflects it appropriately.In May 2011, I again shifted job to company C and Opened a new EPF account.I had not initiated a transfer of A+B EPF to C.Now my questions are: I want to preclose a plot loan. Can I withdraw my old EPF for this purpose. If I withdraw, will it be taxable.

Please clarify.Prasanna

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You can withdraw it just like everyone else is doing so . If you are withdrawing it , then you dont have to mention the need at all .. butyou will have to show that you are unemployed as you cant withdraw while you are employed in other job !

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184 Chandrashekhar May 16, 2012 at 9:06 pm

Hello,I want to understand Employers PF Contribution is part of CTC or Not?What PF Law says?Any Example?

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Truely speaking you should not worry about it . What is employer is giving you 7.3 lacs package and gives 30k as his contribution inCTC . Instead of this , he can always tell you that your package is 7 lacs , then it will look like you are getting extra 30k ?

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186 Suhas May 16, 2012 at 9:18 pm

Hi,

Nice article manish.I my self withdrawn my pf 2 times but never thought of the legal things.

one addtion.. I heard that soon govt is going to have PF Portability similar to current mobile number portabilty.The deadline they have set isby end of 2012..But god knows when it will come.

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yes .. portability talks are going on .. mostly that should happen very soon

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188 Selva May 17, 2012 at 8:43 am

Very useful info..

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Thanks

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190 Venkatesh May 17, 2012 at 7:47 pm

Hi,

I have an active EPF account from last 4 yrs. Now my question is will i be taxed on the total amount if in case i withdraw it let say in other 2



years?

Looking forward for your reply.

Regards

Venkatesh

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No , it would be 6 completed years by then and then it would not be taxable

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192 Sandeep May 17, 2012 at 9:07 pm

Hi

I have pending home loan of 4 Lacs at interest rate of 13% . Will it be adviseable to withdraw the partial amount from EPF to pay off the homeloan . I have corpus of 12 Lacs in EPF & dont have any major liabilities coming up in next 10 years . I have retirement due after 12 years

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Sandeep

I would say you can do that , but I dont think you can withdraw for this , you can take it for a fresh loan, but it would be tough to get itjust for repayment .

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194 Vikram June 8, 2012 at 2:39 pm

Hi

In the above points, it is mentioned that EPF can be withdrawn for repaying loan.

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195 Manish Chauhan June 8, 2012 at 7:02 pm

Only after completing 10 yrs of service

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196 ANKUR May 17, 2012 at 11:03 pm

Good one Manish-Very informative!

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Thanks Ankur

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198 pradeep May 18, 2012 at 1:26 pm

I have any query .What is Difference in EPS and Gratuity .I guess Gratuitu is 4.83 % of basic, which is deposited by Emloyer .is there any relation in both.I can see one component as Gratuity in my CTC, and it is in addition to 12 % of basic that is deposited by Employer and Employee in EPF .

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Gratuity and EPF are totally different . read about gratuity here : http://www.jagoinvestor.com/2009/05/what-is-super-annuation-benefit-and-how.html



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200 SAURABH May 18, 2012 at 4:31 pm

Can you please cross check that out of 12% contributed by employer 8.33% actually goes in EPS,i believe that 8.33% goes to EPF and theremaining goes to EPS.

Please check once,sorry if i am wrong.

BRSaurabh.

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No saurabh .. I dont think so , why do you have that confusion , did you read this somewhere ?

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202 girish c sharma May 18, 2012 at 9:14 pm

thanks for this excellent information.I m working as a lecturer in education department of uttarakhand Govt. Ive completed six n half years .cud i take loan from my EPF accountfor the purchase of a house, if yes how much and at what rate of intrest?

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No, 10 yrs have to be completed for taking money out of your EPF account for house purchase !

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204 Prof KC Arora May 18, 2012 at 11:19 pm

Dear Mr Mansih Chauhan,

Excellent information you have disseminated on EPF and EPS.We are all supposed to know our rights but how many of us actually know and how much, no one knows better than you by now.

I am enlightened with your inputs. but I still have one query on EPS. I left one PSU in 1998 and am getting pension in lieu of employers PFcontirbution. I withdrew my own PF contribution from the PF Trust run by my PSU in 1998 itself. That matter may be clsoed for now.

Then I joined a B-School and joined EPF and EPS from 1st July 2005. My Date Of Birth is 4th May 1951. EPS dedn continuted till Feb 2011by mistake at around 60 years. I have completed 7 years by now and am to retire in 2016 at the age of 65.at the age of 58 in May 2009, I had completed only 3 years 11 months service. I should have withdrwan pension benefit @6500x4x4.18 in2009 itself. Even now I can withdraw whatever I have depsoited with EPS. This I came to know last week only.

But my query is :Can I continue to keep this money in EPS, complete ten years or more of service at the age of 65 (retirement age) and request for pension basedon whatever my credit in EPS account and the length of service at 65?.

Please dig deeper in tunnels of your knowledge store and please reply.

Thanks/ Prof KC Arora

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Yes ..it should be possible for you .. the only thing i would say is the amount of pension you would get from EPS would not be that greatand anyways the limit of 3250 is there per month , which will be penny anyways .. so my personal situation is that you withdraw themoney from EPS and then use it in a different way for generating regular income .

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206 Tom May 19, 2012 at 10:18 am

Manish,Excellent and I really appreciate the way you explained things in very simple words, Keep up the good work !!!

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Thanks Tom

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208 Prof KC Arora May 20, 2012 at 2:11 pm

Thanks, Mr. Manish Chauhan. You have dispensed well informed and mature financial advice. Please keep it up.

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209 Padmesh KC May 21, 2012 at 9:32 pm

Dear Manish,You have done a great service by posting this article.Thank you so much.

I have a question: I have applied for transfer of my PF from my previous employer in Aug 2009. Till now there is no update. Current employersays he does not have any control beyond sending the transfer application.

My previous company is in Bangalore(Electronics city)My current company is in Bangalore(Electronics city).[But registered office is in Noida, PF is maintained here as a Trust].

When I check in PF office Bangalore, they need confirmation from Noida. Not sure how to get this done.

Appreciate your reply/answer.

Padmesh KC

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File an RTI application now , it will work http://www.jagoinvestor.com/2012/03/rti-for-epf-withdrawal-or-transfer.html

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211 Prasad Achaiah May 22, 2012 at 7:43 am

Thanks you for providing such a valuable information.. Most of the time we assume that we are aware of this in full. However, this informationmakes us more equiped to handle this matter better in later stages. This will be a refference point in future. Thanks Manish.

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Good to hear that Prasad

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213 nadeem May 24, 2012 at 4:33 pm

Thanks for valuable information. Non-refundable loan for purchase of house you have stated that once in the service period can you provideany documents related to this.

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214 abhimaniu May 27, 2012 at 1:36 pm

Thats too much info. Thanks

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good or not

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216 siva May 28, 2012 at 5:52 pm

Wonderful article and many hidden facts revealed even which PF officials don;t know

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Thanks for appreciation

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218 Khirubagaran May 30, 2012 at 11:20 am

Hi Manish,

My previous employer didnt give my PF number and it wasnt printed in my payslip as well. When approached them they are not ready toprovide and give me lame excuses.

Can I file a RTI complaint to get my PF number? Is there to procedure to get my PF number?

I worked for 16 months and they have deducted lumpsum amount as my PF contribution.

Once I get the PF number then I can file one more RTI to transfer my money into my account.

Thanks & Regards,Khirubagaran

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I think you can give your company name and PF office should be able to tell you that

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220 Khirubagaran May 31, 2012 at 7:27 pm

Thanks Manish. Will do that and share my entire story once I get my settlement.

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ok

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222 Khirubagaran May 31, 2012 at 7:28 pm

Thanks Manish. Will do that and share my entire story as soon as I get my settlement.

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Great .. please do

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224 Karthik June 6, 2012 at 5:56 pm

http://labour.nic.in/ss/Notificaiton/EnhancementofEDLIbenefits.pdf

This mentions that there is an amendment wrt enhancement of EDLI benefits to upto twenty times of avg monthly salary (max 6500) of last 12months, which makes it maximum possible upto a total of 130,000 ? Pls confirm. Thanks

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If that is the latest one , then better believe it

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Hi,Please explore EPF interest calculation method adopted by EPFO .Compound interest at the end of the year method is not matching with the PF slips.Im searching nos. of sites and articles on the subjectmatter,EPF Interest Calculators,Interest calculation Excel sheets etc. but not found the correct one which matches with PF slips provided by theEPFO.Can I get information through RTI.



Please reply,Thanks

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Did you take into consideration that a part of your EPF money goes into EPS and it does not earn any interest?

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Thanks for reply and also taking this important issue for your kind consideration.Yes Sir,EPS part/contribution not included for calculating interest at my end.Only the EE & ER share(excluding [email protected]%subject to maximum 541/-) taken for calculations.Actually Sir,EPFO calculates interest on EE & ER share separately as shown inissued PF slips also.EPFO office says that our software calculates interest but on questioning which method & formula beingadopted,no reply also no information on site & scheme.Sir,if you are having PF slip issued by the EPFO and monthly contributiondetails(Form-3A) of a particular year , calculate on monthly or annually compounding method basis ,calculation will not matchwith PF slips.Hence,Mr.Suresh K Narulas post/comment dt.-15th May12 is relevant and always missed while talking aboutEPF.Please explore this fact.Sandeep

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Did you get the information about How EPF interest is calcualted through RTI ? Do that and you will get the answer forsure

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230 Krishnendu June 7, 2012 at 4:04 pm

Whether employees inducted at or above Rs.6500/- necessarily come under the EPF and EPS? Also, if a person is a member of the EPF, willthat automatically entitle him a membership of the EPS? Can he choose to be out of it? Can the industry take the plea of not entitling him theprovision?

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the limit of 6500 applies to EPS , one has to compulsorily opt for EPS automaticaly , you cant escape it

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232 Deivasigamani June 7, 2012 at 6:12 pm

Awesome post about EPF. One of the best articles in the www about the finer details of EPF.

Thanks a lot for sharing it and taking the time to explore and write about this.

Deiva

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Hello Manish,

Assuming my basic to be 10000 and my service is since 6 years, how much of loan/advance can i get for repaying my home loan.

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You can not get it for home loan repayment , because it needs atleast 10 yr of service

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Also can we withdraw EPS

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236 amit June 14, 2012 at 11:58 pm

meri skitne ghante ki dutty or kitni salary wale ka epf cut sakta h

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Please ask in simple language !

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238 TULSHIDAS June 17, 2012 at 11:21 am

Pl. let me know, how much days it will take to sanctioned the home loan amt, after submission of form no 31

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239 Manish Chauhan June 19, 2012 at 10:25 am

There is no time frame like this defined .. each bank takes different time

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240 Prasoon June 19, 2012 at 3:11 pm

Manish,

I noticed that EPF Balance (mentioned on EPF slip or sent via SMS) for Employees contribution was slightly different from what I hadcalculated. When I checked with my HR, they told me that its Mar-Feb calculation instead of Apr-Mar calculation. So for F.Y. 2010-11, itlltake contributions of Mar 2010 Feb 2011 into consideration. When I recalculated based on above, it matched for last three years.

Could you please confirm that it is in general practice and not an exception?

Prasoon

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241 Prasoon June 19, 2012 at 3:13 pm

Just to add, Employers contribution was also calculated in the same manner.

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Yes.. this seems correct to me , because the calculation will be done on the lowest balance from 5th to last of month . so what ever youput in FEB , will be added back to that month and for MAR the interest will be added at the end of the MAR month ! .

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243 Naveen Kumar S R June 19, 2012 at 8:31 pm

Thanks a lot. The article was very informative. I need another clarification, is it compulsory for companies to provide EPF option toemployees? Because in my current company we dont have EPF.

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Its compulsory ,if the company has more than 20 employees !

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Thanks for the info. My current companies strength is less than 20.

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then its not mandatory for them .. But you better start acting like your EPF is being cut and start saving it

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what do you recommend as a replacement for EPF? I have opened PPF account and depositing maximum amountpermissible already. Do you suggest any other option?

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Yes PPF is a very valid alternatives. you are going right

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249 Vishnumoorthy June 20, 2012 at 6:25 pm

Hi manish,I have 2 doubts related to this. Could you please solve them?1. To get pension amount, I should have finished 10 years of service and 58+ years both? Or any one condition is applicable?

2. You told pension will be for life long and after persons death, nominee will get it. How pension is paid? how much they will pay? is itmonthly payment? Please give clarity on payment of pension

Thank you,Vishnu

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1. Both

2. Yes its paid montly and how much is mentioned in article

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251 Vishnumoorthy June 21, 2012 at 6:12 pm

Thank you

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252 Pradeep Kumar August 16, 2012 at 3:40 pm

Dear Sir,

I have booked a flat with a builder and the flat is almost complete and now to fund the registeration process I would like towithdraw my PF please let me know is it possible to get the withdrawal for this if yes what documents I have to furnish?

I have gone through the PF Form 31 requirments for buying a flat but the withdrawal amount will go in favour of the builder andfor registration I need the amount in my favour. Pls guide

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253 Urvashi June 22, 2012 at 1:17 pm

I was working in a private company in Mumbai during 2006-2008 where EPF was deducted. After a year or so, I shifted to another company inmumbai where also EPF was deducted and was till Aug 2009. After I shifted to a Company in Gurgaon where EPF is not deducted since thecompany has less than 20 employees.

1)What are my current options in respect of the deduct

10 Hidden EPF Rules – Employee Provident Fund

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