- You earn interest on PF accumulation which is exempt from income tax
- Transferring your EPF accounts while changing jobs has become easier
- You can withdraw PF for illness, higher education, marriage etc
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 Financial planners say that EPF kitty should be meant for long-term savings, not to be withdrawn before one's retirement.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.
5) EPFO subscribers can avail the facility of withdrawals for the purpose of, purchase/construction of house, repayment of house, illness, higher education, marriage etc.