The EPF scheme is a type of scheme which is made for the employees. It is a savings scheme which helps the employees to save money for a better life. The EPF scheme provides employees with pension benefits. It provides pension money to the employees after their retirement. This helps the employee to live a financially secure life even after retirement. However, not all companies are eligible for the EPFO scheme. There are certain criteria that an organization needs to fulfill before registering in the EPFO. What are these criteria? Read on to find out.
Criteria For Organisations And Companies To Be Eligible For EPF?
In this article
The eligibility criteria for an organization or an employer is pretty simple. An organization that employs 20 or less than 20 employees in its company cannot register in the EPF scheme. Start-ups that have less than 20 employees cannot register in the EPF scheme. This rule was made to secure the future of the employee.
There are high chances that a company with fewer employees might not survive in the long run. Providing EPF scheme to such companies is a high risk. There is a rule in the EPF Act, which states that if there is no contribution in an EPF account for more than 36 months, that account is considered null. Due to this rule, the EPFO has forbidden many companies from registering under the EPF Act.
However, a company can even get exempt from EPFO if most of the employees want an exemption. What is the exemption? If a company wishes to provide its employees with PF benefits from a private PF Trust, it is known as an exemption. In such a case, the company can get exempt from EPFO and create a private PF Trust. The company needs to go through various formalities, after which the approval is provided.
Eligibility Criteria For Employees To Be Eligible For EPF?
Not only employers but even employees need to be eligible to register for an EOF account. An employee whose salary is less than INR 15000 has to open an EPF account mandatory for such employees. However, employees who have a salary of more than INR 15000 can also open an EPF account by doing all the formalities.
However, in the 2nd case, the employee needs to make sure that the employer is also ready to sign the forms. Such a condition is that both employee and employer need to contribute to an EPF scheme. So, if the employee’s salary is more than INR 15000, he/she needs to take the employer’s permission to open an EPF account.
Once an EPF account is registered, both employee and the employer have to contribute an equal amount of money to the account. Both parties need to contribute 12% of their monthly salary to the account to get the benefits during retirement.
How To Apply For EPF?
The procedure of applying for the EPF scheme has changed for years. However, if you have newly joined an organization, it is advisable to register for your benefit for an EPF scheme.
An employee can register for the EPF scheme through his/her employer. For registering, the employee needs to fill out form number 11, which consists of all the mandatory details and previous employment details, if any. After filling out form number 11, one needs to fill out form number 2. In this particular form, one needs to nominate a person for his/her EPF account. It is highly advised that an employee should nominate his/her spouse or children, as in case of the employee’s death, the money goes to the nominee only.
While applying for the EPF, one even needs to register for the UAN or Universal Account Number. While the EPFO allots the UAN during the time of EPF registration, older employers need to register for UAN as soon as possible. The major benefit of UAN is that it keeps all the EPF account details of an employee safe in one place. It serves as a place where all the EPF account of an employee can co-exist easily. It becomes easier for the employee to keep track of the PF status and know the account’s balance. As everything is done digitally nowadays, having UAN makes it easier for an employee to login to the portal and view the details.
FAQs
1. Can I register myself at the EPFO office?
Yes, you can register yourself at the EPFO office if you are an employee at an organization. Most of the organizations have registered with the EPFO, making it easier for them to register for the scheme.
2. Is it necessary to get permission from the employer while opening an EPF account?
Yes, it is necessary to get permission from the employer while registering for the EPF account. The employer also has to contribute to the account, due to which his/her signature is mandatory.
3. Is it necessary to get my Aadhar Card linked with EPF?
Nowadays, the government has made it mandatory to link the employee’s Aadhar card linked with the EPF account. During the time of registration, one needs to provide the Aadhar card details too.
4. Can start-ups register with EPFO?
Companies or start-ups who have worked in the industry for more than 3 years and employ more than 20 employees can register in the EPFO.
Bottom Line
Even if an organization is not eligible to register for the EPF Act, an employee can do so. For registering under the EPF Act, the employee needs to take permission from the employer. Having an EPF account can come in handy to help a person live a hassle-free life after retirement. EPF Act is one of the easiest and convenient methods to save money and is hence, approved by many companies.
Leave a Reply