Employee Provident Fund (EPF) - How it works | Interest Rate | Withdrawal Rules | Budget | ETMONEY
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- čas přidán 28. 08. 2024
- EPF or the Employee Provident Fund is perhaps the most multi-dexterous of all available financial products as it serves four functions - 1. Grows wealth, 2. Offers pension, 3. Has in-built insurance and 4. Saves taxes. And all this in addition to giving excellent interest rates of 8.50% at minimal risk.
In this video, ETMONEY’s Shankar Nath does a detailed round-up on this quintessential financial product on which many people know very little about.
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1. A big shout out to Dev from our team who created the superb graphics which has elevated the learning experience.
2. EPF is a vast subject and since most of us have it, it attracts many queries. Please type away your questions on EPF in the comments box below - we'll try to answer most of them. Also browse questions from other viewers as most people have similar queries .. and if you have answers to some of the questions then do share it with all others. Thanks!
Can you please cover more on EDLI.
1. How much is the cover?
2. All of 24% went into EPF and EPS, in that case are we getting insured without premium?
3. What does it insure? Eg: death/medical/accident?
I've read in the comments that, EPS doesn't get any interest. If EPS is not beating today's inflation rate, it would never be able to beat post-retirement inflation. So, why should I contribute to EPS, what am I missing here?
Do we have the provision to tune the composition? For eg, Let's say I'm already investing in a pension scheme, can I shift my EPS contribution to EPF?
@@GK-rl5du Yes EDLI need to be explained
If I merge my previous company PF closing amount. Does it included in current PF calculation? (Old closing amount) + Round(1:11)*8.5/1200 = ?? . Please clarify.
Can excess VPF contribution be claimed with its intrest accured( principle 2.5 lack/year upto 100% Basic would attract tax as per income slab on Interest earned/Year just like FD ....but now the money is compounding at effective PPF returns ( Post Taxation) in a safe government backed organization with much better Liquidity than PPF
One of the best videos on the net for someone to understand every aspect of Provident Fund. Kudos to you Sir and the ET Money team.
Thank you!
The biggest benefit of EPF is its financial inclusiveness. In a country where financial awareness has only begun to improve, EPF by its default opt-in policy, ensures most of the working class has a corpus built for their raining days. I remember 20 years ago, when daily wages were far lower than they are today, the company my Dad used to work, used to deduct EPF (even though it was meagre) from their weekly wages. I only hope those people are getting some pension and got a good corpus upon retirement
Nice narrated with complete frame about the epf, thanks, was having my own understanding the eps part is 3.67% of employer part and balance 8.33% is added to employee benefit from employer contribution. Certainly your narrative given the opposite dimension. Trust this may give better clarity to all. However if you can give narrative with an example for contributions and amount accumulated for a period of 5 years , 10 years with interest calculation on accumulated amounts.. 👍🙏
i would like to say as a HR student the contribution of employer is now 13% which split into 4 parts
1: 8.33 into EPS
2: 3.67 into EPF
3: 0.5 into Admin charges
4: 0.5 into EDLI
Please cover EPS... As EPS is highly confused....
Sure, will do in another video.
@@ETMONEY Yes we need a video on EPS please.... It's highly confusing
Perfect! Exactly the information I was looking for. Thank You ET Money. Your videos are always informational, crisp and to the point. Waiting for the next one!
Great to hear! Thank you for the appreciation, Pramod Balakrishnan
Now explain the meaning of crisp pramod Bala krishnan
So happy to see a video in English😍.
Thank you soo much
Subscribing from now on for more English videos🥰
Can you please cover more on EDLI.
1. How much is the cover?
2. All of 24% went into EPF and EPS, in that case are we getting insured without premium?
3. What does it insure? Eg: death/medical/accident?
I've read in the comments that, EPS doesn't get any interest. If EPS is not beating today's inflation rate, it would never be able to beat post-retirement inflation. So, why should I contribute to EPS, what am I missing here?
Do we have the provision to tune the composition? For eg, Let's say I'm already investing in a pension scheme, can I shift my EPS contribution to EPF?
This is the best explanation I could find on the internet. keep loading such amazing informative videos.
Thanks, will do!
Simply superb.. every presentation you are comming with is explaining in very systematic way and understandable
Thank you so much 🙂
Nice video. Employer will deduct 12 percentage of employee basic and transfer to epf. Employee has an option to choose to transfer rest 88 percentage to epf.. It is called voluntary epf..
Many people do opt for volunteer EPF.. Bocz no other saving will give 8.5 interest.. It will impact people doing volunteer pf
Thanks Shankar! I really admire you for all the knowledge you impart to all of us.
Most welcome, Abhishek Arora. I'm learning aswell in the process and it's the research part that is most exciting. Glad its working for all.
Great info sharing mr Shankar
Infact it is very useful and makes every one to know about EPF &EPS.
Would be great get information on the interset part ,.prior to that if we withdraw our EPF on attainment of 58 years are we eligible to get the interest after withdrawal pl comment
ETMONEY’s ShankarNathGuruji, We Are Grateful For Your Guidance
Thank you Pavan Medam
Another informative video. The only concern I have with EPS is it's still relatively difficult to merge old PF accounts with the current one even if applied online. They reject it with random reasons, hope the government looks into it.
Mr. Mohit Jha, will be able to help you with any assistance that you may require with respect to merging of your PF accounts.
@@srikanthvislawath1937 Thanks Srikanth, I am already in touch with the concerned organization to get it sorted.
Thank you Mohit Jha. We haven't tried the online approach ourselves but I understand things are much better now.
Yess even offline process is complicated
It's been 5 months and my earlier PF which was maintained with a trust is still not transferred to new organisation which maintain it with EPFO. This even after I had UAN and Aadhar linked with OTP coming on my mobile. The process is bad even after going online. Given an option now, I wouldn't be investing in EPFO, I would earn higher interest elsewhere and get more take home.
Good information about EPF and deduction rules i like it
Very Crystal clear explanation 👍 Requesting a video on PF advance withdrawal and the process
Excellent demonstration. I wanted to know more about the Passbook where various components are displayed eg employee share , employer’s share etc . Also which amount needs to be considered while withdrawing amount
Thanks Shankar and ET money team. I had a very basic understanding of EPF. I was not aware there are so many things to it. Good learning of us. As requested by many members here, one video on EPS would be great.
Sankar Sir, Hats off your beautiful narration. I have one doubt about the withdrawal. 1. Can Provident fund corpus be retained even after retirement at 60 years? 2. In such a case, will it continue to end interest? And tax on such continuation? 3. The Recent amendment- the excess contribution over 2.5 lakhs- will it be taxed in the subsequent years also? Keep posting on such relevant topics.
Again a nice video..
1. What happens to EPS component? When can I get it ? Only after 58 years? What would be pension amount and duration?
2. Some big organization have trust, how are they different from epf? Will EPF and EPS components be different in trusts and normal EPF
Mr. Hemanth, EPS can be availed only after attaining age of 58 years. The pension amount would depend on your last drawn basic salary and has a specific formulae to calculate the same.
This is interesting for person for USA to understand the retirement in India.
Great information. So many videos we find in CZcams but no one mentioned 2.5 limit is in employee contribution. Thank you ETMoney !!👍👌
Thank you very much, Venkat Rao
One question. How will be the pension paid ? Will it be monthly ? Also, why EPS accumulation not transferred when I transfer my epf from one PF account to another which is the case on job change ? Will I lose the amount?
Awesome Explanation. One point to add, on who can check EPF details on EPFO website and who cannot and what online servivlces does EPFO provide to the subscribers .
Pls use umang app
@@gvamsi55 I know this. I wanted this to be communicated in the video. Also, not everyone can find the EPF data on EPFO website even if they contribute as the contribution happens through Employer Trusts.
@@gvamsi55 Thanks for contributing
Dear team,
Can you throw some light on applicability of tax if EPF is withdrawn by an employee due to not into service for more than 2 months and age of employee is less than 55 years?
Beautifully explained and illustrated with nice visuals.. always looking forward to listening to you and your insights on various financial features which are at our disposal and can be leveraged well with proper guidance and knowledge.. Thanks for uplifting us.
Most welcome and thanks for the kind words, Sanjiv Y
Shankar ji , thanks a lot and request you to post a video on EPS as well which will certainly help us gain knowledge as to how it works and the benefits of it such as interest & insurance etc. Thanks a lot once again
Thank you Anilkumar Chanda ji. Yes, we'll do a followup session answering the EPF questions asked in this video comments plus EPS
excellent video, cleared all my doubts..
Most welcome
Did you forget to cover EDLI? How does it provide insurance?
Most helpful part of the video is the 2.5 lakh rule which consists only employee contribution and not employer's contribution because this rule has created lot of confusion.
Hi, great demonstration. Requesting details of EPS.
Thank you. Yes, we'll cover EPS in a separate video
yes, I too want same please
Yes..!!
In my knowledge, there are at least 2 things about EPF which should've been included in the video.
1. We're not enrolled in EPS if our very first Basic + DA exceeds 15,000. So a person with more than 15k salary at the time of first salary will only have EPF from employer contribution and not EPS. However, once enrolled in EPS, we cannot revert it back even if our salary increases.
EDIT: and EPS does not earn any interest. our money will be stagnant, not growing even a single percent, and we won't be able to withdraw it either.
2. Withdrawal of EPF while being unemployed has lots of conditions. Only if we're employed for more than 5 years in a row, will we be allowed to take out the money without paying any tax (EEE). If we withdraw before completing our 5 years of continuous service, all the interests earned from EPF will be taxed. Moreover, all our previous years' Tax deductions under 80C due to EPF will be reversed.
These were important points and would've made the video complete.
Very well noted!
Thank you Sir 🙏
Thanks for contributing Aseem Sharan. Yes .. these and a lot more points did come up in our research but we could not fit everything in a single video of 17 mins. There will be a follow-up video certainly .. but nothing works better than viewers doing their own research as you have done here.
@@gd5546 yes you will get.. just keep transferring old pf to a new one while changing the employer. Also, be assured your UAN is not changing everytime you switch your job.
If i have epf account which started 5 years before, now am initiating the contribution towards vpf. So while withdrawal, interest paid on that savings will be taxable?
Hello, pls explain how pension amount is determined upon his retirement at 58 yrs and what would be the pension amount per month in detail.
Thank you Soo much I had doubts in EPF ... But it's cleared now😊😊😊
I regularly watch your videos on personal finance 101. Explained with amazing clarity, great graphics and examples. Please keep them coming. You are doing such a great job.
Thank you!
Wow i never knew the calculations behind it.. thank you ET Money and Shankar Sir❤️
You're most welcome
Very informative.. Some information on EPS functioning could have helped more
Thanks Sir for explaining this complex topic in very simple terms. Just one request, can you also make videos on EPS and EDLI so that we understand how one can get the EPS amount after retirement and what are the benefits given in EDLI
Sure, will do. Thanks for the appreciation, Saurav Kumar.
Can you please make a detailed video on delay in epf interest credit. This delay is happening every year. There are few points which are confusing.
1) What is the impact on compounding due to delay in interest credit.
2) Why EPFO interest credit process is delayed.
3) Can subscribers/contributors of epf can do something regarding this (is there any law to govern it)
Very nicely & meticulously explained the EPF concept Sir. Please make similar kind of a video on NPS as well, regarding understanding of Tier-I, Tier II, Age wise asset allocation automated & manual, withdrawal rules, benefits, different schemes etc. That would a great favour if you make it. 👍👍👍
Great video.Thank you for your comprehensive explanation. One doubt is you haven't elaborated on life insurance after mentioning it at the beginning of the video. Do we pay for life insurance too or not?
Very informative and educational video
Thanks a lot for giving such kind of information
Most welcome. Thanks for liking
It's very well educated , and easy understanding
Thanks
I had restructured my salary components by opting for 1800 pf contribution instead of 12%. Now I have understood I'm loosing on tax benefit from employer contribution. Can I restructure again back to 12%?
The way you are explained is good sir
Thank you
As usual very very clear explained video, thanks
Glad it was helpful!
Very well explained or presented
Thank you
Thank you for this very informative article. Very beautiful conceptualized.
Please explain how does the corpus gets returned after retirement or after attaining the age of 58 yrs
Our pleasure! Thanks for your kind words
Great Sir, Thanks!
Most welcome!
Good video, good job ET Money. Very succinct and easy to understand. Keep them coming please.
Excellent narration and very clear. Thanks Sir
Thank you for your kind words
Perfectly explained. Thank you
Thank you
What about the inbuilt insurance plan? What kind of insurance is this? What will be the coverage? How can we avail it? Can you please throw some light to it?
A wonderful package of knowledge again... and this time it is about EPF... Much needed information for everyone... I already became a very good fan of Mr. Sankar Nath... Awesome presentation... Thank you...
You are most welcome, Nandan Banerjee. Glad to know these content videos are helping
Very informative video. Kindly make video on transfer and widrawal of pf when switching from one company to another with procedure to be followed.
Thank you. Yes, we'll do a follow up session very soon which will be aimed at answering the many questions our viewers are asking here.
This is an awesome video thank you
You are so welcome! Thanks for the appreciation
It's really a very informative video.kindly make a video on different types of provident funds like Public provident fund, Employee Provident fund , statutory Provident fund , National Pension Scheme and other money market instruments.
Interest is not contributed to EPS should have been mentioned too. Great content ntl
hii, it was really good, can you prepare latest status on EPFO, it will be great full
Thank you for this easy to understand and informative video.
You are welcome!
Thanks for the video
Q1) Does epfo provide interest on delayed interest payments? Also interest has not been credited for last year, so is EPF a still good investment option
Q2) How is EPS distributed post retirement?
Mr. Anup, EPFO does provide you with interest on delayed payments but one cannot expect full interest on the delayed payments as it depends when the delay payments are made.
Interest has been credited to majority of the epf subscribers, you may once again check your passbook for the latest transactions.
Good Video, 1 question, If I invest my 100% of Basic Salary in VPF
1.Will I get same interest rate on whole amount?
2.Whole PF+VPF amount after my retirement will be Tax free?
V informative video. Ty
Thank you
Thank you Sir for sharing this information. All ET Money videos are very informative. I would appreciate it if you could share some insights on Voluntary provident fund.
Thank you Sandeep Choudhari.
My new employer doesn't contribute anything to EPS and puts the entire 12% in EPF only. However, my previous employer uses to contribute a small sum to Pensions - is that normal? I saw in my EPF passbook on the UAN portal and the amount under the pensions header is 0 while Employer Contri for EPF is complete 12%
No. It's uncommon for that to happen. Do seek an explanation on this from your company HR on this.
I am also seeing the same.. My prev organization was following this 8.33% or Rs1250 (whichever is lower) into EPS rule but current org is contributing all 12% into EPF only.
Is there any rule or form which I opted by mistake?
Thank you shankar nath sir.Your explanation is awesome
Hi sir, please answer these queries: 1) How to sum up all the EPS amount from different organisations? 2) Do we get the 8.5 percent interest for the EPS amount as well ? we are unable to check the above mentioned 2 points in the EPFO website.please guide
Excellent details with more clarity.
Questions from my side:
1. How do I check the current value / corpus of my EPF account?
2. If I change my employer (get a new job), the PF account will be same or a new account will be made? If yes, Can I tell my new employer to use my previous EPF account?
Please make detailed video on comparison between NPS and PPF.
Only ur channel can explain such detailed and easy to understand video. #ETmoney
Thanks 🙏
Hi. We have discussed NPSvPPF earlier. Check out czcams.com/video/w0ih8scnEz4/video.html and watch from 12 mins 20 secs
Very precise n informative.. Thank you!
Glad it was helpful!
Thank you for explaining it in detail 🙏
Glad it was helpful! Thank you
What is the background of the General Provident fund? its antecedents and what will be it's consequences ?
Great video on EPF👍, lots of information...could you guys also do one on the impact of the new wage code or bill that comes into effect on 1st April 2021...I have heard/read articles saying that take home salary will take a hit since retirals like EPF contribution will increase.
Thank you. Sure. We are still trying to understand it. We'll want to extract those parts that impact investing or wealth accumulation though
Sir please clear my doubt. The employer deducts the PF amount from his employee's salary and the employer transfers the PF amount to his trust account. The employee, the employer has to withdraw the PF amount from the trust account, but the employer Not allowed. How to get employee PF in this scenario
Always a quality content.. great efforts by ET Money team
Much appreciated! Thank you
why do they have to complicate simple things, but thanks to this video
Very informative . Very well explained
Thanx
Pls make vidoe EPS & EDLI
Just discovered your channel. you are a doing a great job. Keep up the good work
I have received an offer letter, where the employer contribution is written as 1800.
My basic is around 45k. I hope the deduction from my salary towards employee contribution will also be the same as of employer (1800).
Basic question. How to covert EPF to EPS? Is it possible? If so how much pension one can get for typical EPF amount?
Well done! Very informative. superb.
Requesting pls clarify why EPF interest rates are declared at the end of the Financial year. It is the only product where a investor doesn't know the rate of interest beforehand !
There is a beautiful line in a Hindu Businessline article which we are just copy-pasting here : _The annual 'interest' declared by the scheme is in reality a dividend resulting from the surplus left with the fund, after deducting its running expenses from its investment income and fees collected from member institutions_
Thanks for the information can you please make a vedio on vpf
Most welcome
Hi you did not cover that how it can be consolidated if you have worked with different organisations
Really, very good in detailed analysis.
Thanks
Please cover more on EPS in next video....
Did u covered eps? video link pls?
bit confuse Step 2 - 3.67 = (1835 EPF) , STEP 2B 8.33 ON 15000= 1250 EPS THEN 8.33 % OF 35000 WHY EPF 3.67 AND AGAIN 8.33 CALCULATED AGAIN ????????? 8.33+8.33+3.67
One 8.33 is calculated against 15,000 -->pension
Other 8.33 is calculated against remaining 35,000 out of example 50,000 salary
Hello Sir..can u plz share ur insights on how will the subscribers can withdraw the amt from epf on age of 58 or more and what happens to 8.33% contributed to EPS - how is that taxed or what are the rules for withdrawal on that amt
Surprisingly no people talking about VPF
Very informative video
Must watch
Thank you, Mr. Shankar Nath, for a very useful, informative, and timely video since some changes have been made to EPF which will be coming into effect from 1st April, 2021. Though I am a regular contributor to Voluntary PF, considering the interest rate it offers, I could not reach out to all my friends and relatives as I am not able to present the way you are presenting the matter. Hats off to you.
I have forwarded the video to my friends and relatives who wish to improve their financial literacy.
I have a query: It appears, contribution deducted from salary is remitted in the following month to PF Account. For March 2021, contribution will be credited to the PF account in April 2021. In that case, how that contribution will be considered for FY 2020-21 or 2021-22. If it is to be considered for 2021-22, then the revised the PF tax rules will apply, then we have to plan our investments accordingly. Timer permitting, please enlighten me.
I have gone through the queries. Thanks to everyone for their queries and Mr. Shankar Nath for responding to all the queries.
With infinite love.
Thanks a lot for such great information
Thank you
Hello Sir,
Why my company is deducting only 1800/- while my basic is more than 15000 per month?
-It was beautifully explained. required more details on interest calculations of EPF... How check the interest has been credited or not?? I have not received for the past FY 19-20.. can anyone help me out
Excellent and very detailed lecture....
Fantastic ☺️
Thank you! Cheers!
Thank you...very informative 🥰
Most welcome
Please Do one Q&A for EPS in the coming topic on eps
Very well explained 👍
Thank you