Your top 10 questions on EPF answered

  1. Is contribution to the EPF mandatory? For those who have a basic salary of up to Rs 6500, contributing to the EPF is mandatory. Contributions are voluntary for those whose basic salary exceeds Rs 6,500. However, it is strongly recommended to make such contributions to avail of the various benefits an EPF account has in store.
  2. What should I do when I change my job? And what should be done when I quit my job without joining elsewhere? At such times, the PF balance could be transferred from one employer to another. The existing balance would continue to stay, with fresh contributions made by the new employer. When you quit your job, the PF could be withdrawn. You need to provide a declaration that you do not intend to work for the next six months.
  3. EPF vs PPF - Which is better? EPF and Public Provident Fund (PPF) are long term investment instruments for retirement. However, a lot of people are confused between these two. The PPF is a statutory scheme of the central government started with the objective of providing old age income security to the unorganized sector workers and self-employed persons. The EPF is a retirement benefit applicable only for salaried employees. It is a fund to which an employee and employer contribute 12 per cent every month (Pre-set by the government of India) of the employee's basic salary. Every year, the employer deposits with the EPFO the contribution from the employer and the employee. Knowingly or unknowingly, 24 per cent of your basic salary is saved every month.
  4. Change in EPF rules: As per the new 2012 rules issued recently, the EPFO has made amendments to the way in which employee and employer contribution would be calculated hereon. For employees, this amendment is particularly important as it impacts his/her take home salary and income tax liability as well.

    A quick look at the amendment: Change in salary definition - Previously, the term 'salary' for computing EPF contribution included basic  DA (dearness allowance). As per the new rules, 'salary' will include basic  DA  allowances that are ordinarily, necessarily and uniformly paid to employees. For example, suppose your monthly salary particulars are as follows - basic: Rs 30,000 p.m., conveyance allowance: Rs 5,000 p.m., medical allowance: Rs 5,000 p.m. As per previous EPF rules, an amount of 12 per cent on basic (Rs 30,000), i.e., Rs 3,600 was the employee's contribution. As per the new rules, an amount of 12 per cent on basic  allowances (Rs 40,000), i.e., Rs 4,800 would form the employee's contribution.
  5. Where does my monthly EPF contribution go and what is the break-up of the contribution to the above schemes? An employee's monthly contribution would go into the following three schemes as per EPF Act, 1952: EPF, 1952; EDLIS (Employees' Deposit Linked Insurance Scheme), 1976, and EPS (Employees' Pension Scheme), 1995.
  6. What is the current interest rate on EPF Account? The Central government revises EPF interest rates every year depending upon the revenues made by EPFO on its previous years' deposits. For FY13, the EPF interest rate is 8.50 per cent.
  7. How do I check my EPF account statement online? EPF members can access their account statements online at This facility is available only to active members who are currently contributing to their EPF accounts.
  8. When can I withdraw my EPF money? You can withdraw from your EPF account on the account your children's education, marriage of self, children and siblings, purchase/construction of a house, or any medical emergencies. However, withdrawal is subject to certain conditions, non-compliance of which would result in penal interest: You should have completed minimum seven years of service; withdrawal can be made only three times in the period during which you hold the EPF account, and the maximum aggregate withdrawal would be 50 per cent of the total contributions made by you.

    For medical emergencies, there is no minimum service period. However, the maximum amount one can withdraw is six times the basic salary and proof of hospitalization is required.

    Withdrawal from EPF account for purchase/construction of a house is available only once in an individual's entire working life. The minimum service period is five years and the maximum withdrawal amount is 36 times your total salary (for construction of property) and 24 times (for purchase of property).
  9. Can I contribute more than 12 per cent of my basic salary towards EPF? Yes, you can. The additional contribution is known as voluntary contribution. But such additional contribution will not be matched by your employer. All the same rules and interest rate will apply to your voluntary contribution regarding withdrawal, transfer, interest rate, etc.
  10. How to locate an EPFO office in case of any grievances? You can locate the office at this URL: is a leading personal finance portal.
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