Employee Provident fund(EPF) or simply provident fund is corpus, in which both the employee and employer make contributions. The reason to contribute in this scheme is to build retirement corpus for the employee. It is a major saving scheme in India. This is mostly used by every salaried person. The salaried person can be from government sector, private sector or public sector organization. It is a very important retirement tool available in India with wide range of benefits. The benefits are like interest generated through this scheme are free from income tax, offer higher interest rate from the bank fixed deposits, offers loan facilities without any mortgage, maturity amount grows with a steady rate etc.
How much contribution is done on monthly basis and by whom?
In provident fund the employer makes contribution of 12 percent of the basic salary of employee and same amount of contribution is done by the employee towards the provident fund account. This contribution is done on monthly basis by both employee and employer. Any organization which has employee strength of 10 or more needs to be get registered with EPFO. EPFO stands for Employee`s Provident Fund Organisation.
What is EPF No?
Previously, when any employee changes the job, they had two options in regards to their EPF accounts namely, either withdraw completely or transfer your account from old to new. In case of transferring the amount from old employer to new employer, the new employer had to request new provident fund account number for the employee. Once it is generated the fund gets transferred. It means that every time any employee changed job, a new employee provident fund account number is generated. This number is unique just like PAN card number. Let’s take an example of EPF number and try to understand it.
- UP stands for Uttar Pradesh.
- RIPL stands for Raghunandanmoney India Private Limited
- 12345 indicate the employer or code.
- 437 indicate the region for which this EPF number is generated.
- 1234567 is the unique provident fund account number which is assigned to the employee when he/she joins any new job
What is UAN No?
Previously, upon joining a new organization you were given a new EPF number every time. This implies if you change 4 jobs then you might end up with 4 different EPF numbers, which could be difficult to manage. This creates many problems. To overcome these problems of generating a new EPF number every time, the concept of UAN was introduced. UAN stands for universal account number. It is a 12 digit number which is given to every employee by the EPFO. Plus it is permanent in nature just like PAN number. It never changes till the time you are employed anywhere. By the help of UAN number you can check your provident fund account status through online mode at any instant of time.
Process to check online PF balance through UAN:
Once you got the UAN number from EPFO. You can check the balance of your account through online mode. For this you have to visit the official website i.e https://uanmembers.epfoservices.in/. Click on the “activate your UAN based registration” tab. Read the instruction and follow the step .In this way you can check online PF balance through UAN.
Process of UAN allotment:
- As you won’t have a UAN no. when you are employed for the first time, your employer would request to EPFO to generate the UAN number for you. Plus the employer will ask the EPFO to generate member Identification number (ID).Through this ID your employer can make contribution toward your account on monthly basis.
- If you already have UAN number, your employer would request the EPFO to generate the only member identification number (ID). This new ID will be linked with the employee’s existing UAN number and the contribution is done by the employee and employer.
- Now the employee has to provide the KYC paper to the employer.
- In the next step the employer updates the KYC details at the EPFO official website.
Difference between UAN no and EPF no?
- UAN number remains the same till the time you are employed whereas the EPF no is generated every time when the employee changes the job.
- You can access your provident fund account online by the help of UAN number whereas in case of EPF there is no such facility is there.
- In case of UAN no you can make withdrawal request without the signature of your employer where as in EPF employer signature is compulsory for withdrawal request.
- UAN no. can be linked with aadhaar card number which is very useful whereas the EPF you cannot link it with aadhaar number.
- In case of job change no need to transfer the provident fund amount from old employer to new employer in case of UAN number. Just give the UAN no to the new employer and the contribution would be done on same account. Whereas in case of EPF you are suppose to transfer the amount from old account to new account. Which can take much longer time and is full of hassles.