The EPF is a private sector retirement benefits scheme for salaried employees. The EPF is managed by the Employees Provident Fund Organization (EPFO). The EPFO covers any organization or entity with 20 or more employees.
Employees who are eligible by the EPF scheme make a fixed contribution of 12% of their basic salary and dearness allowance to the fund. However, 12% of the employer contribution is not deposited in the EPF account.
The Employee Pension Scheme Account receives 8.33 percent of the 12 percent payment, while the employee EPF account receives the remaining 3.67 percent.The Employee Pension Scheme will get 8.33 percent of your employer's monthly contribution (up to Rs 1,250).
| A/C of PF challan | Contribution % | Calculation |
|---|---|---|
| Employer’s PF Contribution – A/c No: 1 | 3.67% | 18000*3.67% = 660 |
| Employer’s EPS/FPF Contribution – A/c No: 10 | 8.33% | 18000*8.33% = 1499 |
| EDLI Contribution – A/c No: 21 | 0.5% | 18000*0.5% = 90 |
| Administrative Charges – A/c No: 2 | 0.5% | 18000*0.5% = 90 |
| Total | Rs. 2,339 |
The Voluntary Provident Fund (VPF), also known as the Voluntary Retirement Fund, is the employee's voluntary contribution to his provident fund account. This contribution is in addition to the employee's 12% contribution to his EPF. The maximum contribution is 100% to his Basic Salary plus Dearness Allowance.
Employers are not required to contribute to their employees' VPF.
Once a contribution has been selected in VPF, it cannot be revoked or discontinued until the base tenure of 5 years has been finished. FY2022, the VPF Interest Rate is set at 8.1 percent.
The Public Provident Fund (PPF) is a tax-free savings vehicle. The scheme's principal goal is to encourage small saving by providing an investment with decent returns paired with income tax benefits. FY2022, the PPF Interest Rate is set at 7.1 percent.
| Interest Rate | 7.1% per annum. |
| Maximum Investment Amount | Rs.500 |
| Tenure | 15 years |
| Risk Profile | Returns Offers guaranteed, Risk-free |
| Tax Benefit | Up to Rs.1.5 lakh under Section 80C |
Basic wages, Dearness Allowances, Retaining Allowances, Conveyance Allowances, Other Allowance, Special Allowance, Leave Travel Allowances, Fixed cash Allowance (Management allowance, educational Allowance, Medical Allowance, Telephone, Food Allowance etc.) , Petrol Reimbursement (without bills and without supporting documentation/data to substantiate the reimbursement is for official purposes) , City Compensatory Allowance or any other allowance paid as fixed component, uniformly and universally having no direct nexus to the outcome of an employee’s normal work.
