EPFO: PF money is deducted from the salary every month, how is it deposited? Understand the complete calculation here

EPFO: There are crores of people in our country who are engaged in some job or the other. A fixed part of their monthly salary is deposited in the Provident Fund account. This money is deposited for the future, so that later he has some economic security. Now how is this money deposited, know the full details

EPFO: The Employees’ Provident Fund Organization (EPFO) provides various facilities to its members. So that people can easily take advantage of it. From checking balance to account transfer, facilities are provided by EPFO. A part of the salary of every employed person is deposited in the PF account every month. This money is controlled by EPFO. Along with the money being deposited in it, you are given interest by EPFO. PF money is deducted every month from the employee’s salary. Now the question arises that how is it deposited, let’s know the complete details.

When you work in a company and your salary is fixed, then 12 percent of it is deducted in EPF every month. Your company also contributes 12%, but some part of it goes to the Pension Scheme (EPS) and the rest remains in EPF. PF account is a kind of long term survival savings. This money remains safe with EPFO. On behalf of the government, it is invested in safe places like government bonds etc.

Complete math of money deposit

If your basic salary and DA together is ₹25,000, then every month ₹3,000 (12%) is deducted from your salary in EPF. Your company also contributes 12%, but some part of it goes to the pension scheme (EPS). Out of this, ₹1,250 (8.33% of ₹15,000) of the company goes to EPS and the remaining ₹1,750 is added to EPF. In this way, every month a total of ₹4,750 (₹3,000 yours + ₹1,750 of the company) is deposited in the EPF account. Every year interest is also added on this amount by the government, which increases your savings even more.

Be aware of your PF money

The money deposited in EPF is the foundation of your social and financial security. Ignoring it is like ignoring your future. In just a few minutes, you can keep the account of your entire hard-earned money at your fingertips. For this, first download your EPF passbook, take control of your finances and become an aware and smart employee.

Tax relief will be available

A big advantage of EPF is that it also helps in saving tax, but after a limit it can be taxed. If a person’s EPF contribution in a year is more than ₹ 2.5 lakh, then the interest received on the extra money will come under the purview of tax. Interest received on contribution up to 2.5 lakh is tax free. If you have invested money in EPF for 5 consecutive years, then there will be no tax on withdrawal of money. But if the account becomes dormant, that is, no money is deposited in it for 3 years, then the interest received on it will come under tax.

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