For the future security of people employed in government and private sector, the government has made Employees Provident Fund (EPF) mandatory.
New Delhi. For the future security of people employed in government and private sector, the government has made Employees Provident Fund (EPF) mandatory. It gives you regular investment, tax saving and future security. On the other hand, you also get the entitlement of pension by investing in PF account. The amount deducted from your salary as Provident Fund gets deposited in two accounts. In this, the first is Provident Fund i.e. EPF and the second is Pension Fund i.e. EPS.
Under the deduction, there is a total deduction of 12 percent from the salary of the employee. The same amount is deposited in the employee’s EPF account by the employer company or organization. 3.67 percent of this deduction is deposited in your EPF account, while 8.33 percent of the deduction is deposited in the Employees’ Pension Scheme. The maximum amount that can be deposited in the EPS account every month is Rs 1,250.
These are the conditions for pension
EPFO members have to contribute for at least 15 years in their EPF account without any interruption to become eligible for pension. Employees get pension when they attain the age of 58 years or more. When the EPF account of the employees is opened, then their EPS account is also opened, in which the employer company or organization has to deposit 12% of the basic salary of the employee. Out of this 12%, 8.33% is deposited in the EPS account of the employee, while 3.67% is deposited in the EPF account.
How much contribution has to be made in EPS account
As per the rules, a part of the contribution made in the EPF account goes to the EPS account. This contribution is made according to the pay scale of Rs 6500 and Rs 15000 per month. If you have joined this scheme before 1st September 2014, then you will have to contribute at the rate of salary of Rs.6500 per month, whereas if you have joined this scheme after that, you will have to contribute at the rate of Rs.15000 per month.
