All it took for inspiration to develop a painless injection was a mosquito bite. Yes, a mosquito uses a unique method to deliver a painless bite and researchers at IIT Kharagpur wondered if they could make an injection that mimicked the mechanical action involved. While most of us think that a mosquito bite hurts, in reality, the irritation is due to chemicals in its saliva. After three years of research, IIT-Kgp, along with the Tokai University of Japan, has invented this novel injection that uses a microneedle to extract blood or deliver drug painlessly by using the same suction-based pressure that a female mosquito uses to suck blood. The diameter of the needle is just 30 micro metre. Besides others, this injection will especially benefit diabetes mellitus patients as blood tests are critical for its diagnosis and management. These patients have to check their blood gl...
What is Employee Provident Fund (EPF) / Provident Fund (PF)?
Employee Provident Fund (EPF) and Provident Fund is same. Employee Provident Fund (EPF) is a retirement benefit scheme available to all salaried employees. The EPF scheme promoting savings to be used post retirement by employees. This fund is maintained and overseen by the Employees Provident Fund Organisation of India (EPFO). Any organization employing a minimum of 20 workers is liable to give EPF benefits to the workers.
Why to invest in Employee Provident Fund (EPF) / Provident Fund (PF)?
The principal and interest in the EPF/PF account are guaranteed by the Government. Equal contributions from employer also add's up the investment amount. 8.33% from employer's contributions is diverted to your EPS (Employee’s Pension Scheme).A retired person gets the lump sum EPS money along with PF.
What is the return expected in Employee Provident Fund (EPF) / Provident Fund (PF)?
8.55% (Guaranteed) (2017-18).
About Employee Provident Fund (EPF) / Provident Fund (PF)
| Criteria | Value |
|---|---|
| Interest | 8-9% (Guaranteed) |
| Rate of Return (Appx) | 8.55% (Guaranteed) |
| Lock-in period | 5 (Years) |
| Account Holder | Employees only |
| Account Opening Restriction | Employer should be eligible. Any organization employing a minimum of 20 workers is liable to give EPF benefits to the workers. |
| Maximum Account Opening Age | 58 |
| Risk Percentage | Zero |
| Place of Purchase | Employees’ Provident Fund Organization (EPFO). The employer can open behalf of the employee. |
| Tax On Return | Withdrawal made at maturity or post completion of 5 years of having availed the scheme is 100% tax free. If the amount is being withdrawn prematurely (within 5 years) it is not free of tax. |
| Investment Mode | Monthly. |
| Loan Against | In the form of Withdrawal. |
| Minimum Investment (PA) | ₹ 1800 |
| Maximum Investment (PA) | Employee's Contribution: 12% of Basic + Dearness Allowance. Employer's Contribution: 8.33% towards EPS and 3.67% towards EPF. |
| Tax Exemption (PA) | ₹ 1.5 lakhs |
| Premature Withdrawal | 75% of EPF amount(Corpus) after 1 month of unemployment. Remaining 25% after 2 months of unemployment. |
Pros of Employee Provident Fund (EPF) / Provident Fund (PF):
- The principal and interest in the EPF/PF account are guaranteed by the Government.
- Withdrawal after 5 years from account opening of EPF is tax free.
- Long term financial security.
- Easy loan from this amount with very less interest rate
- Good return in comparison to other investment options like PPF, Fixed Deposits and Life Insurance.
- Equal contributions from employer also add's up the investment amount.
- 8.33% from employer's contributions is diverted to your EPS (Employee’s Pension Scheme).A retired person gets the lump sum EPS money along with PF.
Cons of Employee Provident Fund (EPF) / Provident Fund (PF):
- Withdrawal before 5 years from account opening of EPF is taxable.
- It is not available to self-employed or retired individuals. EPF is only open to employees of companies which have registered under the EPF Act.
- The EPF contribution is fixed at 12% of salary and DA from the employer and employee. You cannot contribute less than this amount.
- The EPF interest rate is less compare to Mutual Funds(ELSS) or National Pension System (NPS).
Employee Provident Fund (EPF) / Provident Fund (PF) Return
| Criteria | Value |
|---|---|
| Current Age | 30 |
| Retirement Age | 58 |
| Current EPF Balance | ₹ 0 |
| Rate of Interest | 8.55% |
| Your Contribution to EPF | 12% |
| Employer's Contribution to EPF | 3.67% |
| Contribution made for | 28 Years |
| Maturity after | 28 Years |
Average Annual Increase in Salary: 5%
| Monthly Basic Salary | Maturity Amount |
|---|---|
| ₹ 10000 | 3643021 |
| ₹ 50000 | 23768638 |
| ₹ 100000 | 49168276 |
Average Annual Increase in Salary: 10%
In 30 Years guaranteed returns will be more, but the investment amount will vary based on the salary. Other tax saving options will have the control over investment amount.
| Monthly Basic Salary | Maturity Amount |
|---|---|
| ₹ 10000 | 7727640 |
| ₹ 50000 | 44555080 |
| ₹ 100000 | 90741016 |
Average Annual Increase in Salary: 5% and 10%
| Monthly Basic Salary | 5% Increase | 10% Increase |
|---|---|---|
| ₹ 10000 | 3643021 | 7727640 |
| ₹ 50000 | 23768638 | 44555080 |
| ₹ 100000 | 49168276 | 90741016 |
Conclusion
Now you have the understanding of Employee Provident Fund (EPF) / Provident Fund (PF). You can leave the comments if you have any queries. Thank you so much for reading and have a great day.
Good Work !!
ReplyDeleteMuch needed information for every Slary employees !!
Thank you Selvakumar Palanisamy
DeleteGood knowledge about the blog. Thanks for sharing this .Keep it.
ReplyDeleteEmployees Provident Fund (EPF) Organisation