Provident Fund(PF) u/s 80C
- 21 Comment
Introduction
In this article I will be writing about the Provident Fund(PF) or Employee Provident Fund(EPF). It is one of the important component under section 80c. This deduction is done by your employer, so it becomes the compulsory savings for every salaried person. There is few important facts which needs to get the focus. I will write it in this article. If you have any doubts, please post it in the comments section. Subscribe to free email updates.
Employee Provident Fund(EPF)
- Saving on Provident Fund(PF) earns 8.5% interest rates on monthly cumulative basis.
- It is compulsory that 12% of basic salary will be deducted as the PF.
- With your interest, you can increase the PF contribution up to 25% of basic salary.
- Interest income on Provident Fund(PF) is not taxable.
- If you are with drawing the money before five years, the amount is taxable.
- You can close the PF account only when you retire or leaving the company.
- The main advantage of PF is it adds lump sum amount for your retirement apart from any other savings.
- Up to Rs.100000 can be shown as the tax exemption.
Summary
I hope this article would have been very useful for you to know about the Provident Fund(PF). If you have any doubts, please post it in the comments section.
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21 Comments on this post
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Sath said:
Can we close the PF account when we leave the company? I doubt, I guess EPF rule is like this, if you leave and company and didn’t take any other job for 2 months then you can close and get the money. Otherwise, you can only request for transfer of account. Please, correct if I am wrong.
February 3rd, 2010 at 4:17 am -
krishnas said:
Hello Sath,
As per the rule you can close only when you retire or leaving India to take the job abroad or not working.
But, you can withdraw money after two months of leaving the company.
Thanks,
KrishnaFebruary 3rd, 2010 at 4:22 am -
GNP said:
How to know how much fund in my PF a/c, we have option to check online?
February 3rd, 2010 at 11:48 pm -
S.GOPALAKRISHNAN said:
could you kindly give me the reference where the maximum contribution limit of 25% of basic has been prescribed towards employees provident fund?
Thanks.
s.gopalakrishnan
February 3rd, 2010 at 11:51 pm -
Emma said:
What will happen when you leave a company?? The company relieving you will settle your PF amount when you go out.. Will it be taxable?? or do i need to reinvest the same in the company where i am moving to to get the tax exemption?? Pls clarify
February 3rd, 2010 at 11:53 pm -
Hari said:
Krishna,
As you mentioned, you can increase the contribution upto 25%. As far as i know the contribution is fixed 12% from the employee and 12% from the employer. Other than VPF(virftual provident fund) we can’t increase EPF contribution.
Can you please verfity the 25% contribution and let us know. If so let me know the procedure how can i increase.thanks
HariFebruary 4th, 2010 at 8:19 pm -
krishnas said:
Hello Hari,
You can increase the PF contribution upto 100% of basic + DA..
Thanks,
KrishnaFebruary 5th, 2010 at 3:15 am -
Hari said:
Krishna,
I searched in internet to find out the maximum employee contribution in EPF. But every where i found it is 12% of basic. And it should not exceed 6500/-. Here is the EPFlink,
http://www.epfindia.com/payments.htmCorrect me if i am wrong.
Hari
February 8th, 2010 at 9:01 am -
krishnas said:
Hello Hari,
Yes. It shows it should not exceed Rs.6500.
Thanks,
KrishnaFebruary 8th, 2010 at 9:15 pm -
S.GOPALAKRISHNAN said:
I HAVE NOT RECEIVED ANY REPLY TILL TODAY (i.e) 09-02-2010
February 9th, 2010 at 1:15 am -
Dhaval said:
Hello,
I am presently working abroad. I left india last year. My EPF account in india still there. Is it true that without india job, i.e. no monthly epf contribution , no anymre interest will be paid on whatever amount in EPF account. Is it better to withdraw all amount from account or still 8.5% interest is paid.
Please clear me these issues.
Thanks
Dhaval shahFebruary 11th, 2010 at 4:42 am -
vinod n said:
i want know about my pf account ,pl give me the website of this issue
February 20th, 2010 at 10:42 pm -
Dhaval said:
Hello,
I am presently working abroad. I left india last year. My EPF account in india still there. Is it true that without india job, i.e. no monthly epf contribution , no anymre interest will be paid on whatever amount in EPF account. Is it better to withdraw all amount from account or still 8.5% interest is paid.
Please clear me these issues.
Thanks
Dhaval shahFebruary 21st, 2010 at 12:35 am -
SATISH MAURYA said:
Pls give me the rule and regulation of PF & EPF.
February 22nd, 2010 at 1:44 am -
Praveen Yadav said:
Hello Everyone,
Actually i have an offer in hand from a small company about 100 employees world-wide. It is offering me a flat amount say 45000, thats it including TDS. Since its the fiirst time i am switing i am not aware of various salary structures/formats which organisations especially small organizations are offering. Please find below the points which they have told me followed with my queries.:1. Whole amount is Baisc i.e 45,000 – Can it be possible for a company to show whole amount as basic of an employee to the govt. Is this statement is OK.
2. HRA will be 10% of basic i.e 45,000 – shouldn’t it be 40% or 50% of basic as what i have read in budget list. Is this statement is OK.
3. No PF component – so what to do should i close the PF account (in this case will this amt be taxable as its only 3.5 year since this PF account is opened) or i have another options. Is there any better option other than closing PF account in order to get benefit of it.
Thanks ,
PraveenApril 24th, 2010 at 9:09 pm -
ANIL KUMAR said:
How can i know that the amt of PF in my A/C
Having online side so please tell me sirMay 13th, 2010 at 11:24 pm -
Praveen said:
Hi,
I’m working with a Pvt company in Bangalore for last 6years, and I have nearly 4 lacs in my PF account. Is it possible for me to withdraw the complete PF amount as of now (without closing the account) for making use of one of my urgent personal use ? If yes, can I get it done through my company ?Thanks & Regards
PraveenJune 6th, 2010 at 9:56 pm -
Bhaskar Chatterjee said:
Very useful guide for every salaried persons.
June 28th, 2010 at 7:47 pm
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