Employee Provident Fund (EPF)
The EPF is a compulsory contributory retirement savings scheme governed by the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. It is administered by the EPFO, a statutory body under the Ministry of Labour.
Contribution Structure
Both employee and employer contribute 12% of basic salary plus DA each month. The employee's entire 12% goes into EPF. Of the employer's 12%, 8.33% goes to the Employee Pension Scheme (EPS, capped at ₹1,250/month) and 3.67% goes into EPF.
Interest Rate
EPFO declares the rate annually. FY 2023–24 rate was 8.25% per annum, compounded annually. Historically, rates have ranged from 8.1% to 8.65% over the past decade.
Tax Treatment
Employee EPF contributions qualify for deduction under Section 80C (up to ₹1,50,000/year). Interest is tax-exempt provided annual contributions do not exceed ₹2.5 lakh.
Withdrawal Rules
Full withdrawal is permissible upon retirement at 58, unemployment for over two months, or permanent migration abroad. Partial withdrawals are permitted for medical treatment, marriage, home purchase, and higher education, subject to conditions.
Universal Account Number (UAN)
Each member is assigned a UAN — a 12-digit portable identifier that remains constant across employers. It facilitates online access to PF balance, statement downloads, and claim submissions through the EPFO member portal and UMANG app.