PF Deduction From Salary – Where Does EPF Invest?

PF Deduction From Salary | PF Deduction from salary calculation | PF Deduction Percentage | PF Deduction Rules – If you are curious to know that where did your deducted amount is invested, Then here you’ll get every deep detail related to your queries like – pf deduction percentage basic salary, pf deduction calculation, pf deduction from salary calculation 2018 & more @EPFOSCHEME.IN

Updated – August 2018

PF Deduction From Salary – PF For Buying a Home, Daughter’s Marriage

The amount deposited in the PF account is the life-long capital of any employed person. It is related to all his dreams like – buying a home, daughter’s marriage etc. In such a situation, it becomes very important that you know where to invest in a fixed amount every month where PF money is invested. Let’s know the important things related to PF.

Also Read: EPF | UAN – CHECK ELIGIBILITY FOR PF WITHDRAWAL, PARTIAL WITHDRAWALS, PENSION BENEFITS & SETTLEMENT

What is the EPF? [Employees Provident Fund]

Employee Provident Fund, which is usually called the EPF, is a retirement scheme, for those employed.

we invest Advisors Hemant Rostagi explains that in the provident fund, some money is paid for retirement during the job.

Generally, 12 percent of your basic salary goes to the PF. The share gives the same share of the employee to the company. Interest is given at 8.65% per annum for the year 2017-2018.

If the basic salary and DA are 15 thousand rupees or less, it is mandatory for them to deposit the money in the EPF.

If someone’s salary is more than 15 thousand rupees per month, then it has an option that it can come out of the EPF. She will start receiving full salaries without any deduction, but this rule will apply only when the job is beginning.

Once if you want to come out of the EPF scheme and after the salary is more than 15 thousand rupees then you can not come.

What is the difference between EPF and EPS?

Employee Provident Fund is actually a mixture of two different sections i.e. EPF & EPS. The EPS stands for Employee Pension Scheme.

The contribution of the Employee will completely invest in his/her EPF, The employer contribution is 12%, out of which 8.33% is deposited in the pension scheme i.e. EPS and the remaining 3.67% amount goes to the EPF.

If the salary of an employee is more than INR 15,000/-, then the amount deposited in the pension cannot exceed 8.33% of INR 15,000/- i.e. INR 1250/- per month.

So, the member cannot deposit more than the maximum of 1250 rupees in the pension scheme. You will receive the pension only from the time of retirement, whose age is 58 years.

EPF Insurance Benefit – 3.60 Lakhs Insurance Cover

There is also an insurance if a company is not providing group life insurance cover to its employees, then the employee is given small life insurance through EPF.

This cover is provided by the company Employee Deposit Linked Insurance (EDLI). For this, the employer has to deposit 0.5% of the monthly pay of the employer.

This amount is given by the Central Government. The basic pay cap is 15 thousand rupees. In this way, maximum life cover receives only Rs 3.60 lakhs.

How To Contribute More Under EPF | EPF Contribution More Than 12%

According to the Improvement Provident Fund Act, any member of the EPFO can increase his monthly contribution in PF. Every month PF‘s basic salary and DA’s 12 percent employee’s contribution goes.

The company’s contribution is only 12 percent. Any employee can increase their monthly contribution. It can also be 100 percent of basic salary.

What Is the Interest Rate For Provident Fund? How and When You Can get EPF Interest?

Usually fixed in the last quarter of the financial year. The interest received on the EPF is deposited at the end of the financial year according to the interest rate declared for that year in your account.

The contribution to the EPF is done every month, but the interest is received annually and it also gets at the end of the financial year.

Also Read: EPF Low Interest Rates – Why EPF Reduce Interest Rate

EPF Tax Saving under Section 80C

You will also get tax exemption on the contribution you increase in the EPF. This tax exemption is given to you under Section 80C of the Income Tax Act.

However, you can deduct tax at a maximum of Rs 1.5 lakh in one year under 80C.

Where Does EPF Invest?

Weinvest Advisors, Hemant Rostagi, points out that PF money is invested in bonds of banks and big financial institutions.

In addition, government bonds and stock markets also have PF money.

EPF Investment In Stock Market

The amount of your PF will be shown in ETF and Rupee. ETF i.e. Exchange Traded Fund Let me tell you that the money from PF account is invested in the market through EPFO ETF.

EPFO used to deposit 15 percent of its total deposits in ETFs. Now you will see 4 percent of your PF account as an ETF unit. The remaining amount will be seen in cash as PF account.

The amount of your PF will be shown in ETF and Rs. In the meeting of the EPFO Central Board of Trustees, it has been decided that at present, 4 percent of the amount will be seen as ETF units.

The remaining amount will be shown in the PF account as cash. But the percentage of ETF units in the future may be increased. EPFO currently invests 15% of your fund in the stock market through ETF.


Hope this information will help you in order to learn more about your EPFO Account and where your PF invest.

If you have any queries, please feel free to comment below as we’re happy to help you. Team – EPFOSCHEME.IN

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