Predatory (PF) money is very important for employees. This is not just their savings, but a retirement portfolio. The Employees Provident Fund of the country provides PF benefits to all employees. For this, a small portion of the employee’s salary is deducted to deposit into the PF account. However, there are still many benefits associated with a PF account, which are available to PF account holders. Many benefits of EPF are unknown to most people.
Regarding the benefits of a PF account, tax and investment expert Jitendra Solanki explains, ‘For the employee, it is more than just retirement and tax saving investment. There are many benefits associated with this, which make everyone less aware of it. ‘
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The benefit of free insurance
The PF account is opened to any person after getting a job. As soon as an employee’s PF account is opened, he is also insured by default. Under the Employee Deposit Linked Insurance Scheme (EDLI), an employee is insured up to Rs 7 lakh. Seven lakhs of rupees will be paid to the nominee or legal heir of an active member of the EPFO ​​at the time of his death. These benefits are provided by companies and the central government to their employees.
Income tax deduction under 80C
EPF is a great way to save taxes for the working class. Income tax deduction is available at Rs 1.5 lakh deposited in EPF under Section 80C of the Income Tax. EPF account holders can save up to 12 per cent tax on their salaries. However, this benefit is stopped in the new tax law, by choosing the old tax system, you can still take advantage of this benefit.
Pension after retirement
Under the EPFO ​​Act, 12 per cent of the employee’s basic salary and dearness allowance (DA) are credited to the PF account. Similarly, companies deposit 12 percent of basic pay and DA into a PF account, of which 3.67 percent goes to the employee’s account and the remaining 8.33 percent to the employee’s pension plan. Within this, a salaried employee who has worked for at least 10 years is eligible for pension at the age of 58. It offers employees a pension after retirement.
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Loan Facility
The PF account holder can also take out a loan during an emergency. They get this loan at 1% interest but have to repay it within 36 months. This loan is useful for PF account holders in times of trouble.
Facility to withdraw required funds
The amount deposited in a BF account is very useful during a crisis. Employees can withdraw a certain amount only if required under the PF Act. According to PF law, money may be withdrawn for the purpose of buying or building a home, for home loan repayment, for sick children, for higher education, for a girl’s marriage. However, to avail these benefits, account holders must be EPFO ​​members for a period of time.
PF Balance can be used to buy a home
If a PF account holder wants to buy a home, he can use 90 percent of his account. But it should be kept in mind that this money can only be used to buy a home once.
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Interest on a passive account
The good thing about EPAFO is that interest is paid into the employee’s inactive PF account. According to changes made to the law in 2016, PF account holders have now been dormant for more than three years on the amount deposited in their PF account. Prior to this, there was no opportunity to pay interest on a PF account that had been dormant for three years.
