Employee’s Provident Fund (EPF) is one of the main schemes of savings for almost all working people in the Private sector. The primary aim of creating EPF is to provide security to the private sector employees. EPF contribution starts after an individual is employed. It helps private-sector employees to save a fraction of their every month salary. Employee’s Provident Fund can be used when an employee is temporarily or no longer fit to work or at retirement.
Parliament enacted the EPF & MP Act, 1952 which came into force with effect from 4th March 1952. Currently, there three schemes are in operation under this Act namely:
- Employees’ Provident Fund Scheme, 1952(EPS).
- Employees’ Deposit Linked Insurance Scheme, 1976 (EDILS).
- Employees’ Pension Scheme, 1995 (EPS).
As per the Government of India rules and regulations, only an employed individual or organization can open an EPF account, on behalf of its employees. Almost every lawful organization has an EPF account of its employees.
Now a day opening an EPF account is very easy. The employees need to sign a form stating the personal details and account nominee name. Once it is completed, the employer sends the form to the EPFO (Employees’ Provident Fund Organization). After processing and verification, the EPF account and an account number are generated for both the employer and the employee. The EPFO provides Universal Account Number (UAN) to the employee through which they can access his/her EPF account online.
An employee can withdraw the EPF account balance after the two months of unemployment. If in case an employee is terminated from the job due to circumstances beyond his/her control, then also he/she is capable of withdrawing the full amount and the amount will be completely tax-free.