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The government has been under fire ever since it proposed to tax 60 per cent of Employee Provident Fund (EPF) withdrawal. Finance Minister Arun Jaitley on Wednesday said he would spell out the final stand on EPF tax proposal soon during the budget debate in Parliament. Amid this controversy, we take a look at 5 lesser know facts about the Employee Provident Fund. (PTI)
EPFO MAY NOT BE MANDATORY FOR YOU<br> Many may not know they can opt out of the Employee's Provident Fund (EPF) scheme and invest that money on any other avenue of their choice. However, this is limited to people who earn a basic salary above Rs 15,000. For those with basic below Rs 15,000 it is mandatory. Also, you should have never been a subscriber of EPF in the past.</br> -
CONTRIBUTION CAN BE HIKED BEYOND 12 PER CENT OF BASIC<br> If you so feel, you can ask your employer to hike your EPF contribution beyond the 12 per cent of your basic that is deducted. In fact, this can go up to 100 per cent of your basic pay. This is called Voluntary Provident Fund. However, if you do so, the employer is under no obligation to match that extra contribution as they have to do for the initial 12 per cent. </br>
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MONEY CANNOT BE WITHHELD BY EMPLOYER<br> If you had a bitter parting with your employer and are afraid that your employer will block the amount by not completing the withdrawal formalities, take it easy. Your employer cannot block the provident fund amount legally. It is your money and it does not remain with the employer. It is with the Employees Provident Fund Organsiation (EPFO). If your employer is adamant you can send a legal notice. Ultimately, and the employer will have to complete formalities to let you avail of the corpus.</br>
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THERE ARE LIMITATIONS ON WITHDRAWAL WHEN YOU RESIGN<br> If you have left a job where you maintained your EPF account, you cannot immediately withdraw the accumulated money. You need to be without a job for two months at the least to claim your accumulated money. You have to give a declaration on the same. In case you take a new job, the EPF account can be transferred and fresh contributions be made in them from your salary.</br>
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EFPO OFFERS INSURANCE COVER<br> If your salary is below Rs 15,000 you can avail of benefits under the Employees Deposit Linked Insurance Scheme (EDLI). The scheme provides life insurance of up to Rs 6 lakhs. The actual amount to be paid in the event of death to your family or nominee is decided on the last drawn salary. The employer contributes 0.5 per cent of your basic pay as premium for this cover. The sum assured is paid to the family of an EPF subscriber in case of his or her death. However, companies that already provide life insurance benefits or group insurance policy to employees are exempted from contributing to this scheme.</br>
