“The Employees’ Provident Fund Organisation (EPFO) is a statutory body created by the Government of India in 1951 to manage the Employees’ Provident Fund (EPF) and other social security schemes for workers in India. The EPF is a mandatory retirement savings scheme for all employees earning below a certain threshold. It is a contributory scheme where both the employer and employee make regular contributions to the fund. The EPFO manages the funds and pays out pensions and other benefits to eligible workers. In this blog, we will discuss in detail the full form of PF, i.e., Provident Fund, and the latest information related to it.
What is PF?
PF stands for Provident Fund. It is a retirement savings scheme that is mandatory for all employees earning below a certain threshold. Both the employer and employee make regular contributions to the fund, and the EPFO manages the funds and pays out pensions and other benefits to eligible workers.
PF Full Form in Hindi:
The full form of PF in Hindi is “”कर्मचारी भविष्य – निधि संस्था,”” which translates to “”Employees’ Provident Fund Organisation.””
History of Provident Fund:
The concept of Provident Fund can be traced back to the 19th century when British colonial rulers introduced the scheme to help their employees save for their retirement. In 1925, the Indian government introduced the Provident Fund scheme for its employees. The scheme was later extended to cover employees of private sector companies in 1952.
The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, came into effect on 4th March 1952. The act aimed to provide social security to industrial workers by ensuring the provision of funds for their retirement, family obligations, and other unforeseen circumstances.
Features of Provident Fund:
- Mandatory Scheme: Provident Fund is a mandatory retirement savings scheme for all employees earning below a certain threshold.
- Contribution: Both the employer and employee make regular contributions to the fund. The employee contributes 12% of his/her basic salary, and the employer contributes an equal amount.
- Interest: The fund earns interest, and the current rate of interest is 8.5% per annum.
- Withdrawal: The employee can withdraw the entire amount in the fund after retirement or after two months of unemployment. The employee can also withdraw partial amounts in case of specific events such as marriage, education, or medical emergencies.
- Tax Benefits: The contribution made by the employee to the Provident Fund is eligible for tax deductions under Section 80C of the Income Tax Act.
Latest Information on Provident Fund:
- Increase in Interest Rates: The EPFO increased the interest rates on Provident Fund deposits to 8.5% for the financial year 2020-21. The rate was reduced to 8.15% for the previous year.
- Online Transfer: The EPFO introduced an online transfer facility that allows employees to transfer their Provident Fund account from one employer to another. This facility helps employees avoid the hassle of withdrawing and depositing the amount in their new account.
- COVID-19 Relief Measures: The EPFO announced various relief measures for its members during the COVID-19 pandemic. These measures included the provision of non-refundable advance of up to 75% of the Provident Fund balance or three months’ basic wages and DA, whichever is lower.
- Pension Payment: The EPFO revised the pension payment rules to benefit over 6 lakh pensioners. The revised rules allow the family pension to continue in case of the death of the pensioner’s spouse.”