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Voluntary Contribution to Employees Provident Fund

Those who are employed and getting salary contribute towards Employees Provident Fund @ 12% on their Basic and DA. The employer will also contribute an equal amount. This is also an excellent investment opportunity.
 
The rate of interest offered currently is : 8.5%. The interest earned is not taxable.
 
The contribution made from your salary are eligible for deduction under section 80C (upto Rs.1,00,000).


There is another provision also in the Employees Provident Fund scheme. You can contribute more than your stipulated contribution of 12%. This is called voluntary contribution.
  • The member has to contribute at the rate of 12% of his basic pay, D.A. & retaining allowance if any. 
  • In case the member wants to contribute more than this, voluntarily, he can do so at any rate he desires. i.e. upto 100% of basic and D.A. 
  • But the employer is not bound to contribute at the enhanced rate.
  • You can vary your contribution by intimating to your payroll department of HR department.
Can we withdraw the money that I have contributed? Following are the provisions relating to that:


WITHDRAWALS
Types of Benefit Eligibility Eligible Amount Form
Documentary Support
The purchase of site for construction of house
 
5 Years of membership of the Fund (Minimum balance in member’s a/c should be Rs. 1000/-)
* The purchase should be in favour of member or member &  spouse.

l 24 months wages (Basic & DA)
OR
l Member’s own share of contribution + Company’s share of Contribution with interest thereon
 
No.31
 
A declaration from the member that, dwelling site or dwelling house/flat or the house under construction is free from encumberances  and the same is under the title of the member or the spouse (notification dated 25.2.2000) 
The Construction of House  
5 Years of membership of the Fund

(Minimum balance in member’s a/c should be Rs. 1000/-)
* The purchase should be in favour of member or member &  spouse.

l 36 months wages (Basic+DA)
OR
l Members own share of contribution  + Company’s share of contribution with interest thereon

No.31

A declaration from the member that, dwelling site or dwelling house/flat or the house under construction is free from encumberances  and the same is under the title of the member or the spouse (notification dated 25.2.2000)

The purchase of dwelling flat  
5 Year of membership of the Fund

(Minimum balance in member’s a/c should be Rs. 1000/-)
* The purchase should be in favour of member or member &  spouse.

l 36 months wages (Basic+DA)
OR
l Members own share of contribution  + Company’s share of contribution with interest thereon  
No.31  
A declaration from the member that, dwelling site or dwelling house/flat or the house under construction is free from encumberances and the same is under the title of the member or the spouse (notification dated 25.2.2000) 
Additions, Alterations or improvements to the dwelling house  
5 years from the date of completion of dwelling house
 
12 months basic or members own share of contribution with thereon.  
No.31


 68 BB : REPAYMENT OF LOAN
Types of Benefit Eligibility Eligible Amount Form
Documentary Support
Advance from the fund for repayment of loan
10 years membership of the fund & member should have taken loan from Govt. Body
36 month wages (Basic + DA)
OR
Members own share of Contribution + Company’s share of Contribution with interest thereon.
No.31
 
A certificate from the lending authority furnishing the details of loan and outstanding amount.  
68 J : ADVANCE FROM FUND FOR ILLNESS
Types of Benefit Eligibility Eligible Amount Form
Documentary Support
Advance from the fund for illness viz. hospitalisation for more than a month, major surgical operation or suffering from TB, Leprosy, Paralysis, Cancer, Heart ailment etc.
Stay in Hospital at least for a month
6 moths wages (Basic + DA)
No.31
A certificate from the Medical Practitioner for hospitalisation or operation.
68 K : ADVANCE FROM THE FUND FOR MARRIAGE
Types of Benefit Eligibility Eligible Amount Form
Documentary Support
l Advance from the fund for Marriage of self/son/daughter/ sister/brother etc.
l Advance from the fund for education of Son/Daughter
l 7 years membership of the fund & minimum balance in member’s account should be Rs. 1000/-
l 50% of member’s own share of contribution

No.31
Declaration by the member which is attested by the employer.

 68L : ADVANCE IN ABNORMAL CONDITIONS
Types of Benefit Eligibility Eligible Amount Form
Documentary Support
Grant of advance in abnormal conditions, Natural calamities etc.
l Certificate of damage from appropriate authority.
l State Govt. declaration.
l Rs. 5000/- or 50% of member’s own share of contribution (To apply within 4 months)
No.31
l Certificate from the Appropriate Authority.
68 M : ADVANCE TO MEMBER AFFECTED BY CUT IN THE SUPPLY OF ELECTRICITY
Types of Benefit Eligibility Eligible Amount Form
Documentary Support
Grant of advance to members affected by cut in the supply of electricity
l The advance may be granted only to a member whose total wages for any one month commencing from the month of January 1973 were 3/4th or less than 3/4th of wages for a month
l Wages for a month
OR
l Rs.300/-
No.31
Certificate from State Govt. regarding cut in the supply of electricity.
68 N : GRANT OF ADVANCE TO MEMBERS WHO ARE PHYSICALLY HANDICAPPED
Types of Benefit Eligibility Eligible Amount Form
Documentary Support
To Physically Handicapped member for purchase of an equipment required to minimize the hardship on account of handicap.
Production of medical  certificate from a competent medical practitioner to the effect that he is physically handicapped
Basic wages+ DA for six months
or own share of contribution with interest or cost of equipment which ever is least.
No.31
Certificate from the Medical practitioner to the effect that the member is physically handicapped..
Note: For calculation/ computing the period of membership U/P 68B, 68BB, 68K, total service exclusive  of periods of break under the same employer before the scheme is applied to him, as well as period of membership of the fund is always included.

For a long term benefit, I suggest this for employees. This gets deducted from your salary and you need not run around to make the investment. With a good tax free interest and government backing up the amount, it is a fantastic investment.

Cheers,
Gopal

1 comments:

Anonymous said...

This is an eye-opener for me. I didn't know this. I will check with my HR team. Thanks a lot for giving this idea.
Regards, Santosh.

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