Employee Provident Fund Eligibility & Benefits

Worried about your finances after your retirement? The EPF or Employee Provident Fund provides you with financial security after your service tenure. 

It is a mandatory savings scheme where you and your employer contribute 12% of the basic salary to the EPF account. Upon retirement, you can withdraw 100% of this accumulated corpus to meet your financial obligations easily.

Even though it is mandatory for all, there are a few necessary provident fund eligibility criteria when applying for this scheme. 

Read to know all about the required provident fund eligibility criteria and the benefits it offers.

Quick Synopsis

• It is a mandatory savings scheme to help employees financially after retirement.
• Employees earning up to ₹15,000 per month are eligible for this scheme.
• Both partial and complete withdrawal options are available on EPF.

What is EPF?

The EPF or Employee Provident Fund is a scheme run by the EPFO (Employees' Provident Fund Organisation), aiming to provide retirement benefits and social security to people. Both the employer and the employee contribute 12% of their dearness allowance and basic salary towards EPF.

At the beginning of 2025, the Employees' Provident Fund Organisation (EPFO) added 8.23 lakh new member accounts. This reflects a positive trend in employment growth and the government's continued focus on enhancing employee benefits.

Eligibility Criteria of Employee Provident Funds (EPF)

The Provident Fund eligibility of employees is dependent on the following set of criteria:

• All the states in India are eligible to apply for the EPF scheme.
• Employees with a monthly salary of ₹15,000 and more need to do an EPF registration mandatorily.
• Employees are entitled to a vast variety of PF benefits, including withdrawing pension contributions and insurance, after they already become active members of PF.
• Applying individuals need to meet the PF pension scheme eligibility to be able to successfully reap the benefits of the scheme. Failure to meet those requirements can result in a rejection of registration.

Top Benefits of EPF for Employees

Here is a list of some of the benefits which availing an EPF scheme provides for employees:

Allows to Apply for Loans Against EPF Balance

An employee is eligible to apply for loans against their Provident Fund balance. The repayment of the loan should be done within 3 years from the initial date of availing the loan. Failure to repay the whole sum within the tenure can incur charges at a rate of 1% yearly for any kind of financial emergency.

Serves as a Free Insurance

The EPFO provides all holders with the Employees Deposit Linked Insurance or EDLI scheme by default. Hence, there are no insurance premiums that need to be paid by the EPF account holder for death coverage. The maximum insurance cap is currently at ₹7 Lakh for employees.

Exemption From Tax

The contribution of an employee’s EPF is not taxable under Section 80C of the Income Tax Act. If the contribution towards EPF exceeds ₹7.5 Lakhs in a financial year, it is going to be taxable. 

Helpful As a Home Loan

As per the rules of provident fund eligibility, an employee is eligible to withdraw 90% of their total sum amount before retirement when constructing or purchasing a new home.

Partial Withdrawal of Funds During Emergency

EPF states that you can partially withdraw funds from your EPF account when faced with an emergency. 

Did you know? With the Stable Money app, general citizens can earn interest rates up to 8.50% on Fixed Deposits. Download the app today and start growing your savings smarter!

Eligibility for Withdrawing Funds from EPF

The following are the EPF withdrawal rules you must note, if you are wondering about EPF withdrawal eligibility:

• Para 69: After you reach the age of 55 or after your retirement, you can withdraw the full EPF amount. 
• Para 68B: You can withdraw funds from your EPF account for house construction if you hold an EPF account for more than 5 years.
• Para 68BB: Use your funds in your PPF to repay your home loan amount ,provided you have an EPF account for at least 10 years.
• Para 68K: Pay for your or your children’s marriage by withdrawing 50% from your EPF savings. You must hold the account for at least 7 years for this purpose.
• Para 68H: If you are unemployed due to your organisation's lockdown for more than 15 days without pay, you can withdraw funds from the EPF account. You can also withdraw your part of share if you do not receive your salary for 2 months.
• Para 68N: You can purchase medical equipment for physical disability with your part of the EPF contribution with interest or the amount equivalent to your 6 months’ salary with DA, whichever is lower. 
• Para 68J: Withdraw funds from your EPF account in case of medical emergencies for you and your family members. The withdrawal amount will be equal to your six months of basic salary plus your dearness allowance.

EPF Wage Ceiling Limit for Employees

The wage ceiling limit to apply for EPF is presently ₹15,000, including basic salary and dearness allowance in a single month. Anybody earning more than this amount can still voluntarily choose to opt for the EPF scheme, but they have to submit an option under Para 26(6) of the Employee Provident Scheme to do so.

Make the Most out of Savings with the EPF Scheme!

Whether you use the amount of your EPF as a retirement corpus or for other emergency purposes, it serves as a good financial aid. Hence, make sure that you are applying for it and meeting the Provident Fund eligibility criteria.

EPF is a good option to save for the future, and so is a Fixed Deposit. With Stable Money, you can earn up to 8.40% return. Download Stable Money app today!