EPF is a mandatory retirement savings scheme for salaried employees in India, governed by the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, and managed by the Employees' Provident Fund Organisation (EPFO). If your company has 20 or more employees, you're likely already part of this scheme — it's deducted from your salary automatically every month.
The current EPF interest rate for FY 2025–26 is 8.25% per annum — one of the highest guaranteed, near-risk-free returns available in India today. Interest is calculated monthly on your closing balance but credited all at once on March 31 each year.
Every month, 12% of your basic salary + dearness allowance is deducted and goes into your EPF account. Your employer matches this with another 12%. If your basic salary is ₹50,000, your monthly EPF contribution is ₹6,000 (from you) + ₹1,835 (employer's EPF share) = ₹7,835 going into your EPF account monthly, plus ₹4,165 into EPS.
The salary ceiling for EPF contribution is ₹15,000 per month. If your basic salary is above ₹15,000, contributions are calculated on the actual salary, but the EPS contribution is still capped at 8.33% of ₹15,000 = ₹1,250.
Want to contribute more voluntarily? You can — that's called the Voluntary Provident Fund (VPF), and it earns the same 8.25% rate with the same tax benefits.
- Full withdrawal at retirement: After reaching 58 years, or if unemployed for 2+ continuous months
- Partial withdrawal for medical emergencies: Up to 6 months' basic + DA; no lock-in period
- For home purchase/construction: After 5 years of service; up to 90% of balance
- For children's education or marriage: After 7 years; up to 50% of your own contributions
- For home loan repayment: After 10 years; up to 90% of balance
Withdrawal online: Log into EPFO portal → click "Online Services" → "Claim (Form-31/19/10C/10D)" → select claim type → enter bank account details → submit. Funds arrive within 3–10 working days.
EPF contributions up to ₹1.5 lakh per year are eligible for deduction under Section 80C (old tax regime only). Interest earned on contributions up to ₹2.5 lakh per year is completely tax-free. If you contribute more than ₹2.5 lakh in a year, the interest on the excess amount is taxable as "Income from Other Sources." Withdrawal after 5 years of continuous service is entirely tax-free. Withdrawals before 5 years are taxable and subject to TDS.