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EPF has several advantages for the employees and employer, however, there are some disadvantages. In this article, we will discuss the overall impact of EPF.
EPF registration is compulsorily for a certain class of companies. Employee provident fund is a fund accumulated by salaried employees for the retirement benefits. In a simple word, it is a retirement plan for all salaried employee. Saving for retirement is the ultimate goal on the financial road that the salaried employee shoots at. And that’s where Employee Provident Fund comes into the picture.
In most of the cases, it’s forced saving that is resisted initially by most employees. But once you get used to that bite out, it works to your advantage. The Employee Provident Fund is maintained by the Employees’ Provident Fund Organisation of India. Any company who have more than 20 employees under him then he shall register with the Employee Provident Fund Organisation.
EPF can be helpful during the emergency or during the short of funds can borrow from funds. Some are the below advantage of the EPF. carries:
After Registration under Employee PF Act, the employee of the company has following benefits.
In many occasions in the family creates an emergency need of fund. In such a case, EPF helps to withdraw money from the account but in the limit specified.
You can withdraw for any of the above situations from your account up to 50% contribution made. These benefits are allowed for three times to member. To avail, the above benefits member should have served at least for seven years and shall have all the valid documents of events.
Member can withdraw from its EPF account for house repair, maintenance of house or repayment of house loan. Members should satisfy the conditioned stated.
If you availed a housing loan and wish to make any repayment, then you can utilize up to 36 months wages from your EPF balance provided you have completed 10 years of service.
Any alteration or repairing your existing house Member can withdraw up-to 12 months wages once only.
For the above benefit member shall complete 5 years of service or for repair 10 years of service.
Member can get benefits in major surgical operations in a hospital or diseases like TB, leprosy, paralysis, cancer, mental derangement or heart ailment. Member can withdraw up to six times of its salary or the entire contribution made to date, whichever is less. The funds can be utilized for self or any member of the family.
Despite the advantages and opportunities, most contributors to the Employee Provident Fund can’t reach even the Rs 1 crore milestone. More than 13% of the employee to the ET Wealth survey withdrew their Provident Fund balance each time whenever they changed jobs. Withdrawing from the Provident Fund can be anti-productive on two counts.
In our opening, the eligible company should apply for Employee PF Registration under the act. So that adequate social security can be ensured for everyone.