Benefits of Employee Provident Fund
The employee provident fund may be a popular investment scheme for people working in a private sector. This scheme has many other added benefits aside from tax saving.
Read through the advantages of Employee Provident Fund Scheme
- Tax free – The funds in your EPF account is tax free. If you would like to withdraw your EPF money at the time of maturity, the quantity is freed from tax. However, you’ll be taxable if you withdraw the quantity before 5 years of continuous service.
- Long term investment – This provides financial security. The scheme encourages its members to refrain from withdrawing their funds before maturity.
- Pension Scheme – 8.33% out of the 12% contribution of the employer is towards the pension scheme. Hence a member also can enjoy the pension account available.
- Easily accessible – With the linking of Aadhar to the UAN, a member can transfer his/her PF funds during the transfer of jobs automatically by submitting Form 13.
- Insurance benefits – If there’s an absence of group life assurance , the employer has got to contribute 0.5% of the essential pay towards life assurance . Although this amount might sound less, it definitely adds on to the varied benefits.
- Special added benefits – The funds within the EPF account are often used during occasions like
- Medical emergencies – there’s no limit of minimum contribution during medical emergencies
- Housing – After contributing for 3 years, you’re eligible to with draw your PF to get or construct a replacement house or flat. just in case of renovations you would like to contribute for a minimum period of 5 years.
- Marriage or Education – After contributing for a period of seven years, 50% of your PF amount are often withdrawn for a maximum of 3 times .
- Loss of income – If an individual faces a situation of unemployment, then he/she can use the PF amount as a supplement income.
- Death – just in case of the account holder’s death, the accumulated amount are going to be transferred to the listed beneficiary.