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Jun 28, 2023 · EPF deduction has to be 12% of your basic salary as per law. Know how EPF works, its structure & deductions made from your salary toward EPF.
- The contribution of an employer towards the employee’s EPF account is 12% of the salary (basic salary+ dearness allowance+ retaining allowance). The maximum salary limit on which the employer’s contribution is calculated is capped at Rs.15,000.
- Similarly, the employee contributes 12% of his salary to the EPF account. However, as per the employee has the choice to contribute more to his EPF account as per his discretion.
- However, it should be noted that not all of the employer’s contribution goes to the EPF account. Out of the 12% of employer’s contribution, 8.33% goes to the Employees’ Pension Scheme (EPS) and the balance will be credited to the EPF account.
- Additionally, the employer also pays 0.5% towards the Employee Deposit Linked Insurance (EDLI), 0.01% as EDLI handling fees and 0.50% or Rs.500 whichever is higher as the EPF administrative charges.
What is the employee provident fund in Malaysia? The EPF is a retirement planning scheme for employees in Malaysia. Both the employer and employee must make contributions to the fund every month. Employers need to register with the EPF within seven days from the date an employee is employed.
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May 15, 2024 · EPF contributions are tax-deductible under Section 80C of the Income Tax Act. Therefore, employers get incentivized to match their employees' 12% contributions. Employees also benefit from making tax-free withdrawals on their contributions after five years in the scheme or retirement.
Jan 20, 2023 · Tax rule on EPF contributions. Employee’s contribution to the EPF account is allowed as a deduction under Section 80C but within the overall limit of INR 1.5 lakhs. There is no change in this...
Jun 22, 2017 · Synopsis. The Employees' Provident Fund (EPF) is a scheme in which retirement benefits are accumulated. Under the scheme, an employee has to pay a certain contribution towards the scheme and an equal contribution is paid by the employer. ET Online.
