EPF (Employee Provident Fund)

Definition

EPF is a retirement savings scheme managed by the Employees' Provident Fund Organization (EPFO). Both employee and employer contribute 12% of basic salary + dearness allowance. The employee's full contribution goes to EPF; the employer's 12% is split: 3.67% to EPF, 8.33% to EPS (Employee Pension Scheme), and 0.5% to EDLI (Employee Deposit Linked Insurance). EPF interest rate is declared annually (currently 8.25%). Withdrawals before 5 years are taxable; after 5 years, the entire corpus including interest is tax-free.