EPF

Employee Provident Fund is India's statutory retirement savings scheme for salaried employees, administered by the Employees' Provident Fund Organisation (EPFO). Mandatory for establishments with 20 or more employees earning up to ₹15,000 basic (voluntary for higher earners at most firms), EPF is the quiet workhorse of middle-class wealth-building — most Indians accumulate their first crore here without ever noticing.

Both you and your employer contribute 12% of basic + DA each month. Your full 12% goes into EPF. Of the employer's 12%, 8.33% is diverted to the Employees' Pension Scheme (capped at ₹1,250/month on ₹15,000 basic) and the remaining 3.67% goes to EPF. EPFO declares the interest rate annually — 8.25% for FY 2023-24 and FY 2024-25. Over 30 years, a ₹60,000 basic can grow to roughly ₹3.5 crore in the EPF bucket alone.

Withdrawal is tax-free if you complete five continuous years of service — including transfers across employers via UAN. Interest on employee contributions above ₹2.5 lakh/year became taxable from FY 2021-22 (Budget 2021). Premature withdrawal before 5 years invites TDS and adds the full amount to taxable income.

Check our EPF calculator to project your corpus at retirement based on current basic, growth assumption, and years of service.