The Employee Provident Fund (EPF) organization has plans to issue passbook to all the EPF account holders. This service is expected to be implemented from the coming financial year i.e from April, 2012 onwards. With this salaried employees will be issued an EPF Passbook just like bank passbook which will reflect the account balance status of the employee.
The next meeting of EPF will be give a decision on this proposal which will be held on Feb 22, 2012.
EPF Passbook Will Help Employees To :-
- Know the status of their EPF balance.
- In case of death of EPF account holder, nominee can check the status of the account and make withdrawal easily.
- This will encourage employees to save more for their retirement planning.
Employee Provident Fund (EPF), as name suggest is employees fund. In simple words, a fraction of salary get deducted from the monthly salary of every employee and get invested under EPF scheme with equal contribution by the employer. EPFO i.e employee provident fund organization is an institution which manages this fund and invested the same on behalf of the employees and pays interest on the amount invested.
This scheme has been made compulsory for all private sector employees, as there is no retirement benefits in private jobs, this scheme intends to save for the retirement of the employee.
Features/Benefits Of Employee Provident Fund (EPF)
- The interest rate on EPF funds is 9.5% p.a. which is higher than other debt investments.
- Investors get equal contribution from employer of the organization.
- EPF account holder can also take loan from their EPF amount instead of taking the personal loans.
- Employees can easily transfer their EPF balance on switching company.
- Employees and employer contributes 12% of their basic salary to the EPF account.
- It is considered to the safest mode of investment, as maintained by the government organization.
- Offers tax exemption under section 80C of income tax act 1961.
- Interest earned on EPF is tax free.
- No TDS deduction at the time of retirement.