Benefits of PF

In India (Social Security scheme) provided under the Employees Provident Fund and Miscellaneous Provision Act 1952, the Provident Fund is a mandatory post-retirement benefit.  

PF consists of various benefits, and following are the list of them:

  1. Tax Benefit: The employee’s contribution to EPF every year is exempt from income tax, under Section 80C. Also, the interest earned is tax-exempt.
  2. Insurance: The EPFO provides insurance benefit to subscribers under the Employees Deposit Linked Insurance. The nominee shall receive a maximum benefit of Rs. 6 Lakhs in the event of the death of the employee.
  3. Premature Withdrawal: The EPF account is flexible enough to provide a premature withdrawal option to the subscribers to meet some unforeseen emergencies.
  4. Greater Returns: A fixed portion of the funds are invested in Stock Markets (Exchange Traded Funds), thereby leading to the possibility of higher returns.
  5. Pension: 8.33% of the employer’s contribution goes towards pension scheme, and the rest is added to the provident fund of the employee. This leads to the creation of a pension fund, easing the individual’s life after retirement.

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