What is the full form of PF

PF: Provident Fund

PF Stands for Provident Fund. Employee Provident Fund (EPF) is another name for Provident Fund (PF). All salaried people who retire will get financial benefits under the Provident Fund or EPF program. The Employee Provident Fund Organization (EPFO) of India keeps an eye on the PF system. Any organization or business with more than 20 employees is required to register with the EPFO. All salaried workers are thought to benefit greatly from this plan in terms of receiving a lump sum payment upon retirement. A predetermined sum is taken out of an employee's monthly payments as part of the PF process and deposited into their EPF account. After retirement, employees get the funds accumulated in their Employee Provident Fund accounts.

History Of Provident Fund (PF)

The Employee's Provident Fund and Miscellaneous Act, which was passed in 1952, established the EPF or PF (Provident Fund) program. The Employee Provident Fund Organization has established all of the rules and regulations. The Ministry of Labour and Employment oversees the EPFO's operations. In this method, the company will deduct money from the employee's monthly salary. Both the employer and the employee contribute 12 percent of the basic salary to the EPF account as soon as the employee begins working for the company. The D.A (dearness allowance) paid by the employer is also included in this wage.

Important Factors Regarding Provident Fund (PF)

1. The financial year that follows the year in which new interest rates are published, which is defined as April 1 through March 31 of the following year, is valid.
2. Only EPF deposits made in the period of April 2021 through March 2022 will be eligible for the current interest rate of 8.50%.
3. While interest is calculated on a monthly basis, it is only deposited into the EPF account once a year, on March 31st of the relevant fiscal year.
4. A dormant or inactive EPF account is one that has not been used for 36 months in a row.
5. Interest can be earned on accounts that are dormant for workers who haven't yet retired.
6. Deposits made into retired employees' inactive accounts are not subject to interest.
7. Interest accrued on accounts that are not being used is taxed at the member's applicable slab rate.

Objectives

1. Make sure that every employee has a separate EPF account.
2. Compliance must be straightforward to obtain.
3. Make certain that businesses consistently abide by the EPFO's rules and regulations.
4. To enhance the capabilities of internet services and to ensure their dependability.
5. All member accounts should be accessible online with ease.
6. It will take just three days instead of 20 to resolve a claim.
7. Voluntary compliance is encouraged and promoted.

Eligibility Criteria

The following is a list of the requirements for EPF eligibility:

1. To be eligible for benefits under the plan, employees must sign up as active members.
2. From the first day they start working for the company, employees are automatically entitled to PF, insurance, and pension benefits.
3. EPF benefits must be offered to employees by any business with at least 20 employees.
4. The requirements of the people of Jammu and Kashmir are not met by this plan.

Employee's Contribution

The rate of employee contributions is frequently set at 12 percent. The following organizations, however, charge a flat payment of 10 percent.

1. Organizations or companies that have no more than 19 employees.
2. Some businesses have been classified as sick industries by the BIFR.
3. Compared to their net worth, organizations lose a sizable sum of money every year.
4. Coir, guar gum, beedi, brick, and jute industries.
5. Organizations that make monthly payments of less than Rs. 6,500

Employer's Contribution

The minimum contribution from the employer is set at 12% of each employee's salary of Rs. 15,000. (although they can voluntarily contribute more). This is equal to Rs. 1,800 each month. This indicates that Rs. 1,800 must be paid into the plan each month by both the company and the employee. This amount was initially fixed at 12 percent of Rs. 6,500, resulting in a combined contribution of Rs. 780 from the company and the employee. Both sides' contributions are put in the EPFO. Contributors can live freely after retirement thanks to this long-term investment vehicle. You may take your entire PF balance from your account after retiring or leaving your employer.