No matter how familiar things sound, a common man can never be completely aware of all the details that comprise an organization’s elaborate policies and SOPs (Standard Operating Procedures). Rumors are easily spread in the corporate sector as very few people have an in-depth understanding of every function being performed or action taken.
The most common areas where employees misunderstand or get mistaken are the salary and tax-related information. For instance, the workforce of any organization forms misconceptions about the very popular government schemes like Employees’ State Insurance and Employees’ Provident Fund. People are not aware of the basic particulars such as what is EPF, what does it stand for, how to withdraw PF online and others. So, forget about the detailed comprehension regarding the same.
Let’s see what are the top 5 myths about this post-retirement benefit plan:
Every Working Professional Makes The PF Contribution
Is it compulsory for everyone who is working to contribute to the EPF scheme? No, there is an eligibility criteria for employees that they have to fulfill only after which they are liable to pay for the EPF. According to EPF eligibility, the funds contribution is mandatory only for the working professionals who earn a monthly salary of maximum INR 15,000. Others are called non-eligible employees but they can also contribute voluntarily.
All The Organizations Have To Register Under EPF
This one is a huge mistake! Not every organization is supposed to get registered under the EPF scheme. As per the EPFO, only the establishments that have an employee base of more than 20 people must enroll their staff members to contribute to the PF regime. Other factories and corporations are free to make their choices whether to be involved or not.
Offline Method Is Easier Than Online PF Withdrawal
If everyone knew how to withdraw PF online, this myth wouldn’t have started in the first place. Unlike older times when working professionals had to stand in long queues outside EPf offices and get a large amount of paperwork done, today everything is mechanized. With the advent of technology, the EPF balance enquiry and amount withdrawal process became online. The government website for the same, i.e., unifiedportal-mem.epfindia.gov.in allows the registered users to check the available balance in their accounts and withdraw the required PF amount. The online method is, no doubt, ten times faster and easier than the contemporary one.
Employees Can Withdraw PF Only On Retirement
Not true! As per reliable sources, EPF is the government scheme that acts like a post-retirement benefits plan. However, there is an option for the registered employees to withdraw 90% of their available balance within one year before retirement. Also, 75% of the balance can be withdrawn after one month of unemployment and the remaining 25% can be transferred to the new EPF account after getting recruited.
Employees’ Provident Fund Is Always Taxable
Under section 80C, the EPF contribution has many tax benefits. The interest earned and money received on super annotation are exempt from taxes. But, if the amount is withdrawn before retirement it is taxed as salary.