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Employee Provident Fund Organisation (EPFO), the government body responsible for execution of provident fund services, is likely to go paperless within a year. The move is part of the Digital India campaign of the government, said Union Minister of State, Ministry of Finance, Santosh Kumar Gangwar. In fact, the retirement fund body has already launched a few online services. In May, the Ministry of Labour and Employment made changes in the social security schemes of the EPFO to allow electronic or digital fund transfer and payment of EPF benefits, pension disbursement and insurance claim. The development means that payments can now be made to the beneficiaries through electronic or digital fund transfer system.
Here are five major benefits that EPFO guarantees to its subscribers:
1) Typically, both the employer and employee contribute 12 per cent of basic salary towards EPF. An employee’s 12 per cent contribution goes toward EPF kitty, while 8.33 per cent out of the total 12 per cent of the employer’s contribution is invested in EPS or pension scheme. The balance 3.67 per cent is invested in EPF.
2) The employee is able to earn interest on the PF accumulation which is exempt from income tax. Financial planners say that EPF kitty should be meant for long-term savings, not to be withdrawn before one’s retirement. Your EPF account continues to earn interest even if it has been inoperative for more than three years, or 36 months.
3) Under the Employees’ Deposit Linked Insurance Scheme, insurance benefit up to Rs. 6 lakh is admissible to survivor of deceased member.
4) The Aadhaar-linked UAN number (verified and authenticated) facilitates the linking of previous accounts of the members in case of change of job. Transferring your EPF accounts while changing jobs has become easier. New employees are no longer required to file separate EPF transfer claims using Form-13 after changing jobs. It will now be done automatically. EPFO has introduced a new composite form called Form 11 that will replace Form 13 in all cases of auto transfer. However, remember to link your EPFO account with Aadhaar card by December 31, 2017, as mandated by the government.