5 benefits of EPF funds that every salaried person must know.

Aside from being a long-term savings plan, the Provident Fund offers its members a number of other benefits. Here are five EPF benefits that every salaried person should be aware of.

Employees’ Deposit Linked Insurance Scheme (EDLIS) is a deposit-linked insurance scheme for employees (EDLI)

Under the EDLI plan, a PF subscriber can get free insurance up to Rs 7 lakh in event of death during the service period. The EDLI scheme’s insurance benefits were enhanced and liberalised in May. The maximum amount of insurance benefit has been raised from Rs 6 lakh to Rs 7 lakh.

EPF account holders are eligible for a pension plan.

Under the Pension Scheme 1995, an EPF account holder is also entitled to a lifelong pension scheme (EPS). A minimum payment of Rs. 1,000/- per month has been specified for pensioners under the Employees’ Pension Scheme (EPS), 1995, with effect from 01.09.2014.

An EPF Account holder is eligible for a tax exemption under Section 80C of the Income Tax Act.

Partial Fund Withdrawals

In specific circumstances, such as medical emergencies, home loan repayment, building or acquisition of a new home, remodelling of a home, children’s weddings, or self-employment, EPFO authorises partial fund withdrawals.

Loan against PF

In the event of a financial emergency, an EPF member can take out a loan with a 1% interest rate. The short-term loan, on the other hand, must be repaid within 36 months after the loan’s disbursement.

EPFO’s provisional payroll data, released in May, revealed that in the month of March 2021, the organisation added roughly 11.22 lakh net subscribers. Despite the Covid-19 pandemic, cumulative net payroll additions for FY 2021 are nearly on level with the previous year, with 77.08 lakh net additions to the subscriber base.

Quarterly payroll analysis for FY 2020-21 shows that net subscriber additions increased steadily from the second quarter after taking a setback in the first quarter owing to the Covid19 pandemic problem. The fourth quarter (January-March 2021) saw the greatest increase of 33.64 lakh net subscribers, representing a 37.44 percent increase over the third quarter (Oct-Dec, 2020).

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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