Income Tax
EPF (Employees' Provident Fund)
Mandatory retirement savings scheme for employees in India — employee and employer each contribute 12% of basic salary.
Full Definition
Employees' Provident Fund (EPF) is a mandatory retirement savings scheme under the EPF & MP Act 1952 for establishments with 20+ employees. Both employee and employer contribute 12% of basic salary + DA. Employee contribution qualifies for Section 80C deduction. Interest rate: 8.25% per annum (FY 2023-24). EPF interest is tax-free on contributions up to ₹2.5L per year (₹5L for government employees). Excess contributions are taxable. EPF balance can be withdrawn on retirement, resignation (after 2 months unemployment), housing, marriage and medical emergencies.
Related terms
More Income Tax terms
ITR (Income Tax Return)
Annual declaration filed with India's Income Tax Department reporting income, deductions and tax paid.
AY (Assessment Year)
The year in which income earned in the previous financial year is assessed and taxed.
FY (Financial Year)
The 12-month period from April 1 to March 31 during which income is earned and recorded.
PAN (Permanent Account Number)
Unique 10-character alphanumeric identifier issued by the Income Tax Department to every taxpayer.
TAN (Tax Deduction Account Number)
10-character number required by entities that deduct or collect tax at source (TDS/TCS).