Employee Provident Fund (EPF)

Employee Provident Fund (EPF): A Complete & Comprehensive Guide

Are you a salaried employee curious to know how your monthly deduction from your salary is being utilized? Do you know, what are all benefits you can get from your EPF account?

In this post, we are going to discuss in detail whether the investment in EPFs is worth considering or not!

We will dive deeper into the different aspects of EPF in detail and bring out all the benefits and limitations it contains.

So, read on and discover the features and benefits of the EPF Account and figure out whether it is a suitable investment option for you or not!

Table of Content:

What is EPF?

Employee Provident Fund (EPF) is a retirement benefit scheme, which is available to all salaried employees.

It saves a portion of the salary every month from the employee and employer and helps to have a corpus of savings for emergencies or retirement.

  • The maturity period of EPF is at retirement.
  • EPF interest rates fluctuate between 8%-9%. Currently, it is 8.65% for FY 2018-2019.

This fund is handled and maintained by the Employees Provident Fund Organization of India (EPFO) for any company with more than 20 employees is required by law to register with the EPFO.

Basic features of EPF

Eligibility Criteria:

  • EPF is mandatory for all salaried employees who are earning less than Rs. 15,000 a month. However, EPF becomes optional for an employee who is earning higher than Rs. 15,000.
  • For employers who have less than 20 employees in their organization, can be exempt from registering for the EPF Scheme. However, they can voluntarily register for EPF Scheme.
  • For the organization with equal to or more than 20 employees, it is required by the law to register for the EPF Scheme.

Amount to be deposited in EPF account:

An employee can choose to deposit 12% of the fixed amount of Rs.15,000, that is, Rs. 1800 per month. If the salary (Basic Pay+DA) of an employee is equal to or greater than Rs.15,000


12% of the salary. If the salary is less than Rs.15,000.

Applicability of EPF:

  • Applicable on Salary with “Basic Pay+DA”.
  • Equal contribution by Employee and Employer’s side, along with an extra 1% contribution by the employer towards “EDLI” and “EPF+EDLI Admin Charges”.

As shown in the table below, if the size of the company is more than 20 employees, an employee will contribute his/her 12% of salary towards EPF. And, if the size of a company is less than 20 employees, then the employee contribution to the EPF account is 10%, as demonstrated in the table below.

Size of a Company Employee’s Share Employer’s Share
20 or more Employees 12% 3.67% 8.33% 0.5% 0.5%
Less than 20 Employees 10% 1.67% 8.33% 0.5% 0.5%

The employer’s contribution is to be made towards,

  • EPF (Employee Provident Fund)
  • EPS (Employee Pension Scheme)
  • EDLI (Employee Deposit Linked Insurance)
  • EPF + EDLI Admin Charges

3 Scenarios of EPF investment

EPF account consists of an equal contribution by employee and employers. As described below in 3 different scenarios :

Scenario 1: If the salary of an employee is less than or equal to Rs. 15,000.

If the salary of an employee is Rs. 12,000, then the EPF Share of an employee will be 12% of Rs. 12,000, that is, Rs. 1,440/- and the employer’s share is shown below:

EPF EPS EDLI Admin charges
3.67% of Rs.12,000
= Rs.440/-
8.33% of Rs.12,000
= Rs.1000/-
0.5% of Rs.12000
= Rs.60/-
0.5% of Rs.12,000
= Rs.60/-

A large portion of the employer’s share will be contributed towards employee pension, along with EPF and EDLI.

Scenario 2: If the salary of an employee is greater than Rs. 15,000.

Let us say, the salary of an employee is Rs.50,000, but the employee decides to invest the fixed minimum sum of Rs.15,000 to EPF from his/her salary.

Then the employee’s share will be 12% of Rs.15,000, that is, Rs. 1800/-.

And the employer’s share will be 12% of Rs.15,000/-. It is distributed as shown in the table below:

EPF EPS EDLI Admin charges
3.67% of Rs.15,000
= Rs.550/-
8.33% of Rs.15,000
= Rs.1250/-
0.5% of Rs.15,000
= Rs.75/-
0.5% of Rs.15,000
= Rs.75/-

In case an employee is willing to invest 12% of his/her full salary i.e. Rs.50,000/-, it is shown in Scenario-3, discussed in the next section.

Scenario 3: If the salary of an employee is greater than Rs. 15,000 and the employee decides to invest the 12% of his full salary to EPF account.

Let us say, the employee, as discussed in Scenario 2 is willing to invest 12% of his entire salary of Rs.50,000. Then the employee’s share to his EPF account will be 12% of Rs.50,000, that is, Rs.6000/-. But, the employer’s share will be the same as described in Scenario-2. Employer’s contribution will be limited to 12% of the minimum sum of Rs.15,000.

Let’s take a basic example

Mr. Suren starts working with a basic salary of Rs. 20,000, and receives a 5% increment in salary every year.

He has worked for 35 years and has contributed 12% of his basic salary, which has been matched by his employer as 3.67% to EPF and 8.67% to EPS.

His total contribution in 35 working years has been Rs. 26.01 lakh and the company has contributed Rs. 7.95 lakh, making it a total contribution of Rs. 33.96 lakh.

This amount will grow to a total of Rs. 1.38 crore at the time of his retirement! (Assuming the rate of interest stays constant at 8.5%).

Or, for your own EPF Calculations, you can use this EPF Calculator

Benefits of EPFs

Below are the major benefits of EPF:

  • High-interest rates (varies between 8.5%-9%)
  • Risk-Free, as the returns and all the benefits of EPF, are guaranteed.
  • Tax-free returns
  • Lifelong pension
  • Tax Rebate under 80C
  • Insurance benefits through EDLI
  • Premature withdrawal option (discussed in the next section)
  • Permanent access to EPF account with a single UAN. Even if you change your company, your UAN will remain the same.

Rules of withdrawal from EPF account

  • The full amount can be withdrawn at the retirement age of 58 years.
  • 90% of the amount can be withdrawn at the age of 57 years.
  • 100% withdrawal is possible in case of resignation with more than 2 years of being unemployed. But the amount becomes taxable if it is withdrawn before 5 years.

Partial withdrawal is possible in the cases described below:

Case 1: Marriage of Children, Sibling or Self

  • The years of service required is a minimum of 7 years.
  • The maximum amount allowed for withdrawal is 50% of the employee’s share.
  • Proof of marriage, such as a marriage invitation card is required.
  • It can be withdrawn 3 times, based on the requirement.

Case 2: For Medical Treatment

  • The amount can be withdrawn ANY year, the is NO requirement of minimum years of service.
  • Withdrawal for medical treatment is applicable only in the cases defined below:
    • i) Hospitalization for more than 1 month, for any reason.
      ii) Major surgical operation in a hospital.
      iii) If someone is suffering from T.B., leprosy, paralysis, cancer, mental derangement or heart ailment and having been granted leave by his employer for treatment of the illness.
  • Maximum withdrawal amount allowed is 6 times the monthly wages.
  • The amount can be withdrawn any number of times, as per requirement.

Case 3: Education expenses for children or self

  • The years of service required is a minimum of 7 years.
  • The maximum amount allowed for withdrawal is 50% of the employee’s share.
  • It can be withdrawn 3 times, based on the requirement.
  • Only allowed for post matriculation expenses, that is, above class 10.

Case 4: Purchase or Construction of House/Land

  • The years of service required is a minimum of 5 years.
  • It can be withdrawn only once from your EPF account in a lifetime.
  • Property should be in the name of self, spouse or jointly with a spouse.
  • The maximum amount allowed in case of Flat/House is 36 months of wages. However, in the case of land, the maximum amount allowed is 24 months of wages.

Case 5: Repayment of the existing Home-Loan

  • The minimum amount of service required is 10 years.
  • It can also be withdrawn from your EPF account only once.
  • Similar to the case of purchase or construction of house/land, the property must be in the name of self, spouse or jointly with a spouse.
  • The maximum amount allowed for home loan repayment is 36 months of wages.

Case 6: Repair of the existing house

  • In this case, the minimum amount of service required is 10 years.
  • It can be withdrawn only once from your EPF account.
  • The maximum amount allowed in this case is 12 months of wages.
  • This withdrawal is applicable in 2 cases below:
    • i) The house must have completed at least 5 years after its construction.
      ii) House must be in the name of self, spouse or jointly with a spouse.

For example

Let’s say your “Basic Salary + DA” is Rs. 22,000 per month and you have 10+ years of experience in your job and your share in your EPF account is Rs.5 Lacs. Now, let’s calculate how much money you can withdraw in each of the 6 cases mentioned above:

    1. Marriage: 50% of your EPF share, that is Rs.2,50,000.
    2. For medical treatments: 6 months of wages, that is 6*22,000=Rs. 1,32,000.
    3. For education purpose: 50% of your EPF share, that is, Rs.2,50,000.
    4. Purchase or Construction of House: 36 months wages, that is, 36*22,000=7.92 Lacs.
    5. Purchase of land: 24 months wages, that is, 24*22,000=5.28 Lacs.
    6. Repayment of existing home loan: 36 months wages, that is, 36*22,000=7.92 Lacs.
    7. Repair of existing House: 12 months wages, that is, 12*22,000=2.64 Lacs

Various categories of EPF Forms

EPF Forms are the means by which members are supposed to communicate with EPFO. Specific EPF form is used for specific purposes.

Various EPF Forms are mentioned below, with their uses:

FORM 5 It is for the New Employees Registering for EPF and EPS.
FORM 5 (IF) It is used to submit a claim as per the EDLI Scheme.
FORM 10C Used for claiming withdrawal benefits or Scheme certificate of EPS. It can be used by members who have NOT completed the 10 years of eligible service.
FORM 10D Used for claiming the monthly pension. It can be used by members who have completed the 10 years of eligible service.
FORM 11 Used for auto-transfer of EPF, in case of switching the job. UAN number remains the same, only EPF amount will be shifted to a new account.
FORM 13 Used for EPF account transfer. It is a kind of application that needs to be submitted for transferring the old EPF account to a new one.
FORM 14 Used for paying the premium of LIC Policy from your EPF account.
FORM 15G This form is to be submitted by a member to save tax on the income earned. For senior citizens, Form 15H is needed to be filled instead of 15G.
FORM 19 Members can claim for the final settlement of old EPF account by filling this form either online or offline.
FORM 20 Used for the final EPF settlement in case of the death of the employee.
FORM 31 Used for the partial withdrawal of funds from EPF account, based on the withdrawal rules mentioned in the previous section.
FORM 2 Used for the declaration and nomination for EPF and EPS. This form is mandatory to fill after the marriage of an employee.

Common Questions on EPF Forms:

What is Composite claim form?

As per the circular released by EPFO in 2017, the composite claim forms are set to replace the Forms 31, 19 and 10C. The employee is required to submit the Composite Claim Form only for the OFFLINE Settlement.

Which form do I need to fill, if I want to withdraw from EPF account before 5 years of service?

Form 15G is to be filled for such transactions, provided that you have an EPF corpus of more than Rs. 50,000.

Now, let’s explore the online services provided by EPFO.

What is Universal Access Number (UAN)?

Universal Access Number

The UAN is a 12-digit unique number that has been given to every PF member. If UAN is not provided by your employer, you can generate it online in EPFO Website, using your member id provided by your employer. From the EPFO website you will find the form to generate your UAN, as shown below:

EPFO Website for Login

EPFO Website for Login or generating UAN

Before the introduction of the UAN, employees were inconvenienced by the fact that they had to keep shifting their accounts when they shift organizations, but now, the UAN controls all PF accounts of an employee and it can be functioned as one account. The UAN has made almost all processes of the EPF easier and convenient. Some of the benefits are:

  • All PF accounts of an employee are unified and can be treated as one account under the UAN.
  • Transfer from one PF account to another PF account can be done using the UAN.
  • Using the UAN, employees can now make withdrawals from their PF accounts. For those employees who have linked their Aadhaar card to their UAN, they do not need the attestation of their employers to make a withdrawal.
  • Using the UAN, employees can track their accounts, check the contributions, the balance of their account and can manage their PF accounts all by themselves, without the hassle of their employer

UMANG App: Online Mobile Access to EPF services

Unified Mobile Application for New-age Governance or UMANG is developed by the Ministry of Electronics and Information Technology (MeitY) and National e-Governance Division (NeGD).

UMANG has enabled the citizens to download a single mobile app which consists of all the government services. instead of multiple apps for each department and make it easy for people to discover all government services and you can use them anywhere and anytime as per your convenience.

Also, it is possible to link your Aadhar with UMANG App. This way your Aadhar number will be available for all services through UMANG App, whenever required.

How to download and register for UMANG App?

UMANG App is available for Android, Windows, and iOS-platform. You can download it using your respective App Store. For Android users, it is downloaded from the Google Play Store, the process to register is simple and is described below:

  • Once you download UMANG mobile app, select your language and provide your mobile number for OTP verification purposes.
  • Select 4-digit MPIN and set your security question and answer.
  • Fill all the personal details such as Gender, DoB, City, state, etc. the app will show your profile completeness in percentage, highlighted in the image below.

After login, you will be able to see all the services provided by the app, as shown below:
UMANG-App-Home Page

UMANG App Home Page

For utilizing EPF related services, you should click on the EPFO icon. Under this option, you can utilize the services given below:
UMANG App EPFO Dashboard
UMANG App: EPFO Dashboard

1. View Passbook: In this option, it is possible to view all sort of transactions in the form of passbook for the current and previous employer. To view the passbook you need to provide your UAN Number and OTP for verification.
2. Raise Claim: It is used to avail the partial withdrawal benefits, under the form 10C, 19 and 31, you can submit your claim online, through UMANG App.
3. Track claim: You can track the status of your submitted claim through UMANG App.
4. General services: You can have access to general services, such as;

  • Know your claim status.
  • Account details on SMS.
  • Account details on missed calls
  • Search EPFO Office, and
  • Search establishment by its name or code.

5. Aadhar seeding for KYC purpose.
6. Pensioner Services such as Updating Jeevan Pramaan and viewing passbook.

Other services are provided for employers as well, where they can get their TRRN status and get remittance details by their Establishment ID.

The pensioners utilizing the benefits of EPS Scheme can click on “Pensioner Services” option and get the associated services accessible on their finger-tips.


Beware of unofficial apps providing EPF related services. Putting your sensitive data such as UAN Number or Aadhar number can be misused. With the rise in digital technology, hackers are also getting more creative, they can misuse your information to any extent!

So, it is mandatory to keep the essential precautionary measures before utilizing any digital service.

Limitations of EPF

  • Less flexibility due to long lock-in period.
  • The amount is taxable if it is withdrawn before 5 years.
  • Though EPF provides a 100% risk-free interest of 8.65%. But it is possible to earn higher returns with the other investment options such as Mutual Funds etc., with reasonable risk.


EPF is undoubtedly a good investment option given by the Government of India to salaried employees. But if you keep in mind, the limitations of EPF, as discussed in the previous section, there are other investment options available which overcome all of the limitations of an EPF investment.

For example, if you invest the equivalent amount (that is, 12% of your salary) into equity mutual funds, you will get much higher returns as compared to returns you receive from your EPF, with the reasonable amount of risk. Also, there is a flexibility to take your amount anytime without any fixed lock-in period.

For more detail on your personalized investment option customized for you and your family, you can book a FREE consultation call with us, by clicking the link below:


2 thoughts on “Employee Provident Fund (EPF): A Complete & Comprehensive Guide”

Leave a Reply

Your email address will not be published. Required fields are marked *

two × three =