Employee Provident Fund (EPF)


In India, the Employee Provident Fund (EPF) is a vital component of the social security system, providing financial stability and retirement benefits to millions of employees. Established under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952, the provident fund scheme aims to ensure long-term savings and a secure future for employees. In this blog, we will delve into the details of the provident fund in India, its features, benefits, and the process of accessing and managing the funds.


What is the Employee Provident Fund (EPF) ?

The Employee Provident Fund Scheme or EPF, introduced in India in 1952, is a retirement benefit scheme where, both the employer and the employee, contribute a certain sum every month till the employee is working. It not only provides tax benefits but also a relatively higher interest rate than other saving schemes. The Employees’ Provident Fund Organization (EPFO) is responsible for administering the fund.


Features and Benefits of the Employee Provident Fund (EPF):-

There are lots of benefits if your Employee Provident Fund (EPF) has been deducted by the employer from your salary :-

  • Retirement Benefits: The primary purpose of the provident fund is to provide a stable income source during an employee’s retirement years.
  • Tax Benefits: Contributions made by both the employee and employer are eligible for tax deductions under the Income Tax Act.
  • Compound Interest: The funds deposited in the provident fund account earn compound interest, which helps grow the savings over time.
  • Pension Benefit: From Employer contribution 8.33% has been deposited to your Employee Pension Scheme (EPS) which you will get after the age of 58 years on monthly basis from EPFO.
  • Withdrawal Flexibility: Employees can withdraw the accumulated amount under certain conditions such as retirement, resignation, unemployment, or in case of medical emergencies.


Eligibility Criteria for Employee Provident Fund

EPF Eligibility for Employees :- You are eligible for EPF if you fulfil the following criteria:

  • You work at an organisation that has 20 or more employees. The company must be registered with the EPFO. An organisation with less than 20 employees is not required to register for EPF. However, they can do so voluntarily.
  • You are getting earning (Basic Salary + D.A.) less than ₹15,000 then it is compulsory to register for the EPF. However, employees earning more than ₹15,000 can also voluntarily stay in the EPF scheme, provided your employer and an Assistant PF commissioner consents to it.

EPF Eligibility for Employer :- Your employer is required to register for EPFO for employees of 20 or more. However, they can opt out of the mandatory contribution if they have less than 20 people in the organisation. The organisation can also request for exemption if the majority of the employees vote for employee PF exemption.


Components of Employee Provident Fund (EPF)

The EPF is not one scheme. It actually comprises three different schemes with three different objectives.

  • The first part of EPF is where your retirement benefits are accumulated. This is basically the wealth generation part of the scheme.
  • The second part of EPF is the Employee Pension Scheme (EPS). The purpose of EPS is to generate pension for employees after the age of 58 years.
  • The third and final part of EPF is the Employee Deposit Linked Insurance Scheme or EDLI, which is a life insurance cover.

The good thing is you don’t need to register separately for all these benefits. When you register for EPF, you are automatically registered for EPS and EDLI as well.


Contributions to the Employee Provident Fund (EPF):

Under EPF, from employee salary, 12 percent of the basic salary and DA is deposited in the PF fund. An equal amount is also deposited by the employer. The benefit of compounding interest is available on the money deposited on EPF. Of the employer’s share, 8.33 per cent goes to the Employees’ Pension Scheme (EPS), while the remaining 3.67 per cent is invested in the EPF. After retirement, the employees get PF money in lump sum and EPS money as pension. Currently, In F.Y. 2023-24, Interest rate is 8.15 % is being received on EPF. Which is more than all the savings schemes.


By EPF Contribution EPS Contribution EDLI Contribution
EMPLOYEE 12% /10% ## 0 0
EMPLOYER Difference of EE
share and
8.33% 0.5%

##10% rate is applicable for

  • Any establishment in which less than 20 employees are employed.
  • Any sick industrial company and which has been declared as such by the Board for Industrial and Financial Reconstruction
  • Any establishment which has at the end of any financial year, accumulated losses equal to or exceeding its entire net worth and
  • Any establishment in following industries:-
    (a) Jute (b) Beedi (c) Brick (d) Coir and (e) Guar gum Factories.


Employee Provident Fund (EPF) Withdrawal Rules 2023

You can withdraw PF, provided you satisfy some conditions. Here are some reasons for which you can withdraw your PF funds: 

  • In Case of Unemployment :- Any PF account holder can withdraw up to 75% of the total accumulated amount if he/she has been unemployed for more than 1 month after relinquishing employment. If the unemployment period exceeds 2 months, the remaining 25% can also be withdrawn.
  • For Education:- A PF account holder can withdraw up to 50% of their total contribution to their Employee Provident Fund (EPF) (only the employee’s contribution). You can use this amount to pay for the education of your children after class 10 as well as for your own higher education.
  • For Medical Treatment :- A PF or EPF account holder can also withdraw the EPF balance to pay for urgent medical treatments for certain diseases. This facility is allowed for both self-usage or to pay for treatment of immediate family members. One can withdraw 6 month’s basic wage and dearness allowance, or the employee share along with interest, whichever is less.
  • For Repaying Existing Debts:- Individuals can withdraw 36 months of basic wage + dearness allowance, or the total of employee and employer share along with interest to pay their home loan EMIs. However, this facility is available only after a minimum of 10 year’s contribution towards the EPF account.
  • For Marriage:- You can opt to withdraw money from your EPF account to meet the necessary expenses for your wedding, wedding of a child, or wedding of a sibling. However, you can avail this benefit if you have completed at least seven years of continuous service. Up to 50% of the amount you have contributed towards your EPF account, and the interest accumulated can be utilised for a maximum of three times.
  • For Specially Abled Individuals :- According to PF withdrawal rules 2023, specially-abled account holders are eligible to withdraw 6 months’ basic salary and dearness allowance or the employee’s share of contribution along with interest, whichever is lower, to pay for their equipment.
  • For Home Renovation :- Employee Provident fund (EPF) new rules also come with a provision to withdraw 12 month’s basic wage plus Dearness Allowance, as well as the employee’s share with interest (whichever is smaller) for home alteration, improvement, or expansion. The residential property can be of the PF account holder, owned by his or her spouse, or owned jointly. An individual can avail this facility 2 times, once after 5 years of completing the residential property, and after 10 years can withdraw PF amount for the first time.
  • Construction or Purchase of a House :-
    • To opt for this facility, you must have completed at least 5 years of continuous service.
    • The house or land that you are purchasing must be in your name, your spouse’s name, or both. Any other combination is not permitted.
    • You can withdraw basic salary plus dearness allowance for up to 24 months.
    • There should be no legal disputes for the property in question. Further, you must provide proof of registration of the property to avail the benefits.
    • According to PF withdrawal rules, the account holder is allowed to make a premature withdrawal to purchase empty land or prefabricated houses. 

Revised EPF withdrawal rules also allow an account holder to withdraw up to 90% of the accumulated funds after they reach 54 years of age or a year before retirement/superannuation. 

Also, in case of the sudden demise of an employee (while he or she is still in service), their nominee/beneficiary can apply for a settlement (Form 20), or a monthly pension (Form 10D)


Employee Provident Fund Tax Implication

If you are planning to withdraw ₹50,000 or more from your corpus within 5 years of opening your EPF account, the withdrawal will attract a TDS of 10% (provided you have a valid PAN card in India) or 30% (if you don’t have a PAN card).

You can avoid TDS deduction by producing Form 15H or Form 15G.



The Employee Provident Fund (EPF) in India plays a crucial role in ensuring the financial security and retirement benefits of employees. It is an effective social security initiative that encourages savings and provides a reliable avenue for long-term wealth creation. EPF not only benefits employees by safeguarding their future but also helps employers fulfill their legal obligations and foster a harmonious work environment. By understanding the intricacies of EPF, employees and employers can make informed decisions and harness the advantages offered by this significant social security scheme.


Frequently Asked Questions :-


  1. What is the minimum eligibility for PF?

Ans :- Minimum eligibility for PF is that employee salary should be less than Rs 15000 and he is working in any establishment where at least 20 or more employees worked there.


2. Is PF mandatory for salary above 25000?

Ans :- No, if basic salary and D.A. is above Rs 15000 then PF is not mandatory for that employee. However such employee can still ask employer for deduction of PF. If your employer is agree then PF can be deducted on Salary above Rs 15000.


3. How can I withdraw my PF online?

Ans :- For withdraw of PF online. you have login EPFO e-SEWA portal by using you UAN and password. After login, you can look for claim (Form- 31, 19, 10C & 10D) in the online services section. After you open the claim form, you are required to upload the bank cancel cheque for verification and then click the submit button for submission of your EPF withdrawal.


4. Is there any tax exemption on Employee Provident Fund (EPF) withdrawals?

Ans:- If you have rendered 5 years of continuous service with an establishment with your PF account, you can enjoy tax exemption on your EPF withdrawal. However, if you withdraw before rendering 5 years of uninterrupted service, you will have to pay tax on the amount withdrawn.


5. How pension contribution can be withdrawn from Employee Provident Fund (EPF)?

Ans :- Pension Contribution can be withdrawn in different scenario which are given below :-

  • If you have completed less than 10 years but more than 6 months of service, you can withdraw your pension contribution in EPS. However, this is only permitted if you have been unemployed for 2 months. 
  • If you have completed 10 years of service and are at least 50 years old, you can withdraw your pension early, but it will be reduced. The pension rate is lowered by 4% for each year left until you reach 58 years of age.
  • If you have attained 58 years of age and completed 10 years of service, you are eligible for 100% of the pension amount, paid out on a monthly basis. You need to follow the due procedure to withdraw your monthly pension. We’ll discuss that in the next section.


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