The Employees’ Provident Fund Organisation (EPFO) gives Provident Fund (PF) benefit to all its members. For this PF account benefit, a small amount is deducted monthly from the EPF account holders or PF account holders. This EPFO benefit is quite handy in the EPFO subscriber’s life post-retirement.
However, apart from the EPF account or PF account benefits, there are some other EPFO benefits that an EPFO member or EPF passbook holder must know. Here are top 5 EPFO benefits that an EPFO member must know:
1) Free insurance benefit up to Rs 6 lakh
Once an EPFO member gets his or her EPF or PF account opened, it becomes eligible for free insurance up to Rs 6 lakh automatically. This Rs 6 lakh free insurance benefit is given to the EPFO member under the Employee Deposit Linked Insurance. This insurance is beneficial for the EPFO member, in case, he or she dies during the service period. In such case, the EPF passbook holder’s nominee or survivor will be eligible for up to Rs 6 lakh insurance benefit.
2) Income tax exemption benefit
To avail income tax exemption under Section 80C of the Income Tax Act, one can claim one’s PF or EPF contribution in a particular financial year. However, this should not be more than Rs 1.5 lakh in one financial year. IT should also be noted that one can contribute up to 12 per cent of one’s basic monthly salary on one’s PF or EPF account to avail all EPFO benefits being made available to the subscribers.
3) Pension benefits under EPS Scheme
The EPF account holder must know that out of net EPF passbook balance at the time of retirement, 8.33 per cent goes into the EPS account which is given as monthly pension to the EPFO member.
4) EPF interest on dormant EPF account
An EPF account holder is eligible for EPF interest rate even when the employee is not depositing its monthly EPF contribution in it or the EPF account has gone dormant. According to the new EPFO rules made in 2016, EPF passbook holders are now eligible for EPF interest even when the EPF account has been dormant for more than three years. `
5) Provident Fund Withdrawal
An EPFO member is eligible for EPF withdrawal during the contingency or financial crisis. The EPFO allows the EPF passbook holder to go for partial PF withdrawal in certain circumstances as we witnessed during COVID-19. In fact, if there is no such COVID-19 crisis, an EPF passbook holder can go for partial withdrawal to avoid taking a loan from a bank.