EPFO’s Crorepati Formula: To become an EPFO member, you have to work in the organized sector, it is necessary to have a company with 20 or more employees. Being a member of EPFO provides savings, insurance cover, pension and interest free interest.
EPFO’s Crorepati Formula: Employee Provident Fund (EPF) is a popular savings scheme, which aims to provide financial security for retirement to salary based employees. The Employee Provident Fund scheme is governed under the EPF Scheme Act of 1952, EDLI Act of 1976 and Pension Scheme Act of 1995.
Under this scheme, both the employee and the employer contribute 12-12% of the employee’s basic salary to the EPF account. In this scheme, the government revives the interest every year, as well as it is tax free. At the time of retirement from Employee Provident Fund, the employee gets the amount deposited in the PF account in lump sum, which also includes the interest earned.
This is how a fund of 2.5 crores will be created on a salary of 50,000
If you want to deposit a fund of 2.5 crores in your PF account, then for this your salary (salary + basic) should be 50 thousand rupees. Also, you have to work for at least 30 years. At the same time, for this you should get 8.1 percent interest on PF fund. Also, your salary should also increase at the rate of 5 percent annually. If you fulfill all these things, then at the time of retirement you will have a fund of 2.5 crores.
What is the eligibility to become an EPFO member?
To become an EPFO member, you have to work in the organized sector, it is necessary to have a company with 20 or more employees. Being a member of EPFO provides savings, insurance cover, pension and interest free interest. Along with this, you can also withdraw money from this fund in an emergency.
Tax exemption in EPFO account
If you have an EPFO account and PF is being deposited in it every month, then this is the best option to save tax. Let us tell you that this facility is not available in the new tax regime, for this you will have to choose the old tax regime. If you choose the old tax regime, then you can save up to 12 percent of the tax on your salary under section 80C.
Free insurance facility in EPFO
Employees who have a PF account also get insurance by default. Under Employee Deposit Linked Insurance (EDLI), the employee is insured up to Rs 6 lakh. In case of death of an active member of EPFO during the service period, up to Rs 6 lakh is paid to his nominee or legal heir. Companies and the central government provide this benefit to their employees.
