05 May 2010
I was working in a pvt. ltd. company where they were contributing Rs.780 per month towards the PF and deducting the same amount from my salary as my contribution.
Now i have switched over to another company where my salary is Rs.20,000 PM (15000 basic, 4000 HRA, 1000 Conveyance)but they are not contributing any amount towards the PF as my basic salary is above Rs.6500 PM but i want to transfer my PF account with the new employer and continue to contribute.
so my question is whether alon i can contribute towards the PF or is it necessary that Employer should also contribute. In case if i alone can cotribute than how much i have to contribute.
05 May 2010
In case of Employee Provident Fund Scheme (EPF), the employer has to contribute the equal contribution of the employee contribution.
My advice is that you should withdraw the P.F. amount of the previous employer and open a PPF Account (Public Provident Fund) with any State Bank of India and deposit the sum in the account. You can deposit the amount to extent of minimum of Rs.500 per annum and maximum of Rs.70000/- per annum. Also PPF is eligible for deduction u/s.80C and interest on PPF is totally exempted from Income Tax.
06 May 2010
But sir in case of PPF i don't think that i will get the benefit of pension because in case of EPF part of the contribution goes to the pension fund and if i don't get transeferred my EPF account wiht new employer than my services will not be counted for the atleast 10 years countinues services which is neseccary to get the pension.
second thing is that what will happen with amount that i had contributed in the my previous company.
06 May 2010
If you withdraw the EPF amount before 10 years of service, you will get the full amount of your contribution, employer contribution towards PF & Pension Fund along with the interest thereon. So, if you withdraw the EPF amount, you are not losing anything.
If you want the pension, you can take the LIC's pension policies which also covers the risk.
CAclubindia
