New Delhi: Provident Fund, other than being a long term savings scheme gives several additional benefits to the subscribers.
Here are 5 benefits of EPF funds that every salaried person must know.
Employees’ Deposit Linked Insurance Scheme (EDLI)
A PF subscriber can avail benefits of free insurance up to Rs 7 lakh in case of death during the service period under EDLI scheme. In May, the insurance benefits under the EDLI scheme were enhanced and liberalized. Amount of maximum insurance benefit has been increased from Rs 6 lakh to Rs 7 lakh.
Pension Scheme for EPF account holder
An EPF Account holder is also entitled to lifelong pension scheme under Pension Scheme 1995 (EPS). As regards Employees’ Pension Scheme (EPS), 1995, a minimum pension of Rs. 1,000/- per month has been prescribed with effect from 01.09.2014 for the pensioners under Employees’ Pension Scheme (EPS), 1995.
Income Tax exemption
This savings scheme offers tax exemption under Section 80C of the Income Tax Act to an EPF Account holder.
Partial Fund Withdrawals
EPFO allows for Partial Fund Withdrawals in certain cases such as medical emergency, home loan repayment, construction or purchase of new house, renovation of house, wedding of children or self.
Loan against PF
An EPF member can also avail loan in the wake of a financial emergency with a 1 percent rate of interest. However, the short term must be repaid within 36 months of loan disbursal.
The provisional payroll data of EPFO published in May showed that that EPFO has added around 11.22 lakh net subscribers in the month of March, 2021. Despite Covid-19 pandemic, cumulative net payroll addition for FY 2021 is almost at par with last year, with 77.08 lakh net additions to subscriber’s base.
Quarterly analysis of payroll for the FY 2020-21 indicates that net subscriber’s addition improved consistently from 2nd quarter after taking hit in the 1st quarter due to crisis of Covid19 pandemic. Maximum improvement of 33.64 lakh net subscribers was observed during the 4th quarter (Jan-March, 2021) with a growth of 37.44% as compared to the third quarter (Oct-Dec, 2020).