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Employees Provident Funds and Miscellaneous Provisions Act, 1952

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Introduction

Employees Provident Fund established in 1952 and hence the act is named as Employees Provident Fund and Miscellaneous Provisions Act, 1952, which extend to the whole of India.

What is EPF?

Provident fund is a welfare scheme for the benefits of the employees. Under this scheme both the employee & employer contribute their part but whole of the amount is deposited by the employer. Employer deducted the employee share from the salary of the employee. Interest earned on the amount is also credited to the member’s Provident Fund Account (PF account) and is available to the employee at the time of retirement or exit from employment as the case may be, provided certain conditions are fulfilled.

Types of schemes under the Act

Employees’ Provident Fund Scheme, 1952: Employees’ Provident Fund Scheme was set up under the Act for the purpose of providing a post retirement benefit for the employees or a class of employees or their legal heirs in case of death, employed under an establishment to which this Act applies.

Employees’ Pension Scheme, 1995: Employees’ Pension Scheme was framed under the Act for the purpose of providing the superannuation pension, retiring pension or permanent total disablement pension to the employees of any establishment or class of establishments to whom this Act applies; and widow or widower’s pension, children pension or orphan pension payable to the beneficiaries of such employees.

Employees’ Deposit-linked Insurance Scheme, 1976: Employees’ Deposit-linked Insurance Scheme (EDLI Scheme) was framed under the Act for the purpose of providing insurance benefits to the employees of an establishment or a class of establishments to whom this Act applies in case of death while in service.

Applicability

The Act is applicable to every factory or industry mentioned in Schedule 1 of the Act, wherein 20 or more persons are employed or to any other establishment which the Central Government specifies by notification in the official Gazette, even when the number of employees is less than 20.

Benefits

The employees covered under the various schemes of the Act are entitled for the following benefits:-

Employees can take advances or make withdrawals.

PF amount of a deceased member is payable to the nominees or legal heirs.

The employer not only contributes towards the PF but also makes the necessary contributions towards the employee’s pension which can be used by the employee post-retirement

Under the EDLI Scheme employees are properly insured in order to avail the lump sum benefit at the time of death while in service.

EEE (Exempt, Exempt, Exempt) tax benefit under the Income Tax Act enables tax-free returns for the employees.

Employees receive special benefits in the form of added income to their savings in the form of interest.

PF account can be transferrable if any member changes employment from one establishment to another where such Provident Fund scheme is applicable.

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