The Employee Provident Fund is one of the most beneficial schemes that is used by corporations and companies across the country. If your company has 20 or more employees, your company is eligible for this scheme. More than the company, this scheme is important for the salaried class a lot more, and this article will tell you how.
Tax Benefits: An Employee Provident Fund account is eligible for tax benefits, the interest rate earned is exempt from the income tax. This can be helpful to you in the long run as well because you will even get these benefits up to three years after the account has been lying dormant. On the other hand, if you have been using this account continuously for five years, your withdrawals will not be taxable. That is if the employer does not terminate the business or you do not quit voluntarily.
Pension Benefits: The biggest highlight of this scheme is that it while there is a 12% contribution of wages in the EPF scheme, there is an 8.33% of the employer’s share that is added in the Employees’ Pension Scheme. If you have a contribution in that for 10 years, then you are eligible for a lifelong pension under this scheme.
Higher Returns, even if You Withdraw Early: Even though the government encourages that you do not use your PF account as a normal account, you can still withdraw from it after 5 to 10 years, depending on the account. You can also withdraw money, for a marriage or education. However, that can only be up to 50% of the employee’s share in the account. There are different provisions for different purposes. So, you must check the specifications for your account.
These were only some of the most common benefits one can receive from their PF accounts. These can change according to the industry you are in and a variety of other factors, which depend on the payroll process in India (Visit here: https://www.workforce.org.in/payroll_outsourcing.php). Therefore, you need to be very clear of what exactly you will be adding from your share into the account and what you will be receiving at different time periods.
What is your role, as an employer?
You have to understand whether or not your company is eligible for this scheme. If you are not sure, you can easily contact any PF consultant in your locality. If you are in Delhi, it is best you consult a PF consultant in Delhi (Click here: https://www.workforce.org.in/). This is because they will have the exact specifications on the kind of industries, units are covered under this scheme. Therefore, it is always better to consult someone beforehand. And. More importantly, you have to keep in mind that if you have 20 or more employees. You to ensure that you contact a PF consultant soon and understand the process you need to undertake as an employer. This has a lot of benefits for you, as an employer, as well.
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