Introduction of EPF India

Overview of Employee Provident Fund (EPF)EPF India is implemented by the Employees Provident Fund Organization (EPFO) of India.


An establishment with 20 or more workers working in any industry should register with EPFO.  EPFO is statutory body of the Indian government under Labor and Employment Ministry.

A provident fund is created with a purpose of providing financial security and stability to elderly people and it is one of the main platforms of saving in India for nearly all people working in Private Sector organizations. Generally one contributes in these funds when one starts as employee, the contribution are made on a regular basis (monthly in most cases).  Its reason is to help employees save a part of their salary every month, to be used in an happening that the employee is temporarily or no longer fit to work or at retirement.

Employees Provident Fund EPF India : Employee contribution is matched by employers contribution (till 12%). The employer contribution is exempt form tax and employees contribution is taxable but eligible for deduction under section 80c of income tax  Act. The EPT amount earns interest as declared by government.

    1.  Employees Provided Fund Scheme, EPF India 1952.

    2.  Employees Deposit Linked Insurance Scheme (EDLIS)  1976.

    3.  Employees Pension Scheme, 1995 (the replace the Employees family unit Pension scheme 1971)  (EPS).

The Table below giving  the rates of contribution of EPF, EPS , EDLI , admin charges in India.

Rates of contribution of EPF, EPS, EDLI, Admin charges in India

Scheme NameEmployee ContributionEmployer Contribution
Employee provident fund12%3.67%
Employee Pension scheme08.33%
Employee Deposit linked insurance 00.5%
EPF Administrative charges 00.50% from jan 15
PF Admin Account 01.1%
EDLIS Administrative charges00.01%
Total 25.61%

How Does one join EPF  under EPFO ?

Employees working is private sector, drawing basic salary up to Rs 15000 (From sep 1 2014 salary limit has been increased to Rs 15000 before it was Rs 6500) have to compulsory contribute to the Provident Fund. It is beneficial for employees who draw salary above Rs 15001 to become member of Provident as a deducted form the salary before it is deposited on bank or given hence compulsorily saving happens.

A persons who starts job after 1 sep 2014 and earning more than Rs 15000 in basic and DA will not be contributing to the EPS  or Pension scheme.

UAN  is universal Account Number :

The UAN  is a 12 digit number selected to employee who is contributing to EPF india.  Universal number is a large  towards changing the EPF services to online policy and making it more user friendly.

Please note that : The universal account number remains unchanged during the lifetime of an employee. It does not change while you change in jobs. Now one has UAN number and PF number  also call as Member ID.

Interest on EPF  :

EPF India : At the start of each year there would be opening balance, the amount accumulate till then.  Contribution is during monthly but interest is calculated annual. One get interest on opening  balance and monthly contribution. So for further year the original opening balance would be : older opening balance + contribution throughout the annually + interest on the (older opening balance + contribution). Interest on EPF deposits for the FY 2016-17 is 8.65 percent.

Withdrawal and Transfer  of  EPF :

At the time of changes  of job what happen to EPF ?

Legally it is compulsory to transfer EPF Account when the job change. But, people generally do not do it ; instead of transferring, they withdraw the amount.

From 10 Feb 2016 You can not withdraw Employer contribution to EPF before 58 years.

EPF India : PF  And Challan Accounts

In PF Challan five category  

A/c1 – 12% + 3.67 % ( 12 %  for employee share and 3.67 % of Employer )

A/c2-1.1% (Admin charges)

A/c10-8.33% (For pension sche) 0.5 % (EDLI, ie Emplo. Deposit link insurance )

A/c21-0.5% (EDLI, ie Emplo. Deposit link insurance)

A/c22-0.01% (Admin charges)

EPF India : About PF Contribution – Employer must pay 12% of Basic Salary, in which 8.33% will goes to Pension Scheme balance 3.67 will goes to PF.

PF Calculation

Employee NameBasic + DAEmployee @ 12%Employer EPS@ 8.33%Employer EPF @ 3.67
warnar 1200014401000440

EPF and EPS :

As per he provision, 8.33% out of 12% contribution of the employers goes to EPS and remaining 3.67% goes to EPF. The contribution towards EPS is limited 8.33% of pensionable salary.

In other words, after : maximum Rs 1250 p.m (Rs 15000 * 0.833) shall go to EPS and the balance of employers contribution shall go into EPF India.

Those who wants to know about accounting knowledge, please go through the Accounting terms and Golden Rules of Accounting.

How can transfer EPF Account ?

EPF India : Employees’ Provident Fund (EPF) account from your previous employer to your current employer could do easily. The Member e-SEWA portal allow EPF account holders to transfer their money from one PF account to another.

How to transfer your EPF account and These are as follows:

EPF India : EPF account holder should make sure that  UAN (Universal Account Number) is activate  the Member e-SEWA portal. Here to be familiar with how to make active the UAN on the Member e-SEWA portal.

 A person should make sure that information such as name, contact information, marital status and so correctly reflect on the Member e-SEWA portal once login.

A person must also ensure that a bank account numbers, IFSC bank and Aadhaar detail are right on the Member e-SEWA portal. more, make sure that the bank account information and Aadhaar are digitally approved from the employer and UIDAI. Such information could be checked with ‘KYC’ selection under  ‘Manage’ tab once loggin in to your account. Digitally approved means that your details should the digitally inquiry by the UIDAI and your employer. Bank account details have to be digitally accepted by the employer. Bank account information  to be digitally approved by the employer and Aadhaar once seeded, will be confirmed by UIDAI.

When the  submission of transfer form, an OTP via SMS send on the registered mobile number. as a result, make sure that the same is active.

When submit the transfer form , member will be mandatory to choose the such kind of  attestation of form will be make  by the current  or before employer. Employee must make a selection taking into consideration that employer will be require to attest such form using DSC (Digital Signature Certificate) of authorized signatory. then, it is a pre-requisite that at least one of the employer’s and  earlier or present – DSC is registered on the portal