FAQs on PF, VPF
Provident Fund:
- What are the various schemes under the Act?
There are three different schemes under PF: Employees’ Provident Fund Scheme, Employees’ Pension Fund Scheme, and Employees’ Deposit-Linked Insurance Scheme
- What are the contributions?
The Provident Fund Scheme receives the employee’s contribution, currently 12% of base pay.
- How much can PF contributions earn in interest?
Contributions to a PF are currently eligible for an annual interest rate of 9.5%.
- Is the interest in PF available?
No
- If I quit my current job, what happens to my PF contribution?
If you leave your current employer, you have two options: you can either withdraw the funds or transfer the accumulated balance to the trust or RPFC of the new employer. When an employee starts working for the new company, they can make a transfer request to the RPFC or trust of the previous employer.
However, withdrawal requests can only be submitted after two months of absence. If an employee is working on an international assignment, posting, or job, they can apply for withdrawal as soon as they quit the company or resign.
- Can I transfer my PF holdings to the current employer’s RPFC from another?
Yes, you can!
- Can I get a loan against my PF accumulated balance?
Depending on the purpose of the loan, you can get either non-refundable loans or refundable loans against your PF balance. Loans that can be repaid must be paid back in monthly instalments, while loans that cannot be repaid are like withdrawals.
- What amount of time does it require after my resignation to settle my PF account?
It typically takes around 60-90 days to settle the records.
- What happens in the case of the death of an employee?
Settlement is based on the most recent nomination form that has been recorded if the employee has submitted one.
- If I withdraw my PF accumulations, is there any tax deduction at the time of settlement?
If the member has five years of continuous service with the employer (which includes time spent as a member of the previous employer or employers, if a transfer is received), there is no tax deduction. Otherwise, the member is responsible for deducting tax from the employer’s share of the employee’s PF accumulations.
- How often can I change my nomination?
You are free to alter your nomination at any time.
- Can I nominate more than one person as my nominee under PF?
Yes, you may nominate multiple persons.
- Can the employee contributions towards the Employees’ Pension Scheme, 1995, be withdrawn?
Yes, only by submitting Form 10-C, only if he has NOT completed 10 years of service.
Volunteer Provident Fund:
- What is the Voluntary Provident Fund?
The employee’s voluntary fund contribution to his provident fund account is known as the voluntary retirement fund, or VPF. VPF contribution is beyond the 12% contribution by an employee towards his EPF. Interest is paid out at the same rate as the EPF
- Who can invest in a voluntary provident fund?
The EPF can be extended with a VPF. It applies only to salaried employees who receive their monthly payments through a company salary account.
- Benefits of Voluntary Provident Fund
The interest is 8.65% per annum under this plan. It differs. Under Section 80C, contributions up to 1.5 lakhs PA and accrued interest are exempt from tax, resulting in higher long-term returns.
- How are VPF and EPF different from each other?
A person who has an EPF account is required to contribute 12% of his basic salary, Dearness Allowance, and fixed components to the fund. In a VPF, it is a voluntary contribution with a maximum limit of 100%.
- Who is eligible to open a VPF account?
All salaried employees are eligible to open a VPF account.
- Can I change my voluntary contribution percentage at any time?
You can change your voluntary contribution only at the start of the financial year. Once the change is opted for, it must run throughout the year and cannot be changed till the end of the financial year.
- Can I withdraw only my voluntary contribution?
No, voluntary contributions alone cannot be withdrawn.
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