employees provident fund

Has Anyone Actually Seen Their EPF ePassbook?

by Vinaya HS on December 28, 2012

in Finance

Again, having read all the wonderful PR about the Employee Provident Fund Organization’s (EPFO) wonderful ePassbook Service, I thought I should download mine before the year ends.

But, I think I am quite unlucky this December. First, I couldn’t make an iWish and now I’m unable to access my EPF ePassbook. Here’s the exact error that I see –

Your request date. 11/09/2012 for e-Passbook for account number ABMNO00123450000000123 (a dummy account number and not my real one) is under process. You shall be intimated on SMS when the same is available.

Another project terminated. It’s almost two months and I haven’t received that SMS.

Leads me to ask the following –

  • Has anyone of you actually seen your EPF ePassbook? I’d love to know.

  • The folks who write those wonderful personal finance articles in the media, do they actually sit down and actually try what they’re writing about?

What do you think?


So D’s office sends this email (excerpts below) –

Please find attached detailed guidelines for checking your Employee Provident Fund (EPF) account balance online through http://www.epfindia.nic.in/MembBal.html.

– Click on http://www.epfindia.nic.in/MembBal.html.

– Select <State>. Select <City>.

– Enter <Company> Establishment Number (for example: 00ABCDE).

– Leave Extension Number blank.

– Enter your EPF account number (for example: 000MNOP or MNOP).

– Enter your name and mobile number.

– Click the “I Agree” Check Box.

– Click the Submit button.

On successful submission of above information, you will receive the details through SMS on the given mobile number.

Excited, I immediately tried with D’s EPF Account Number only to see the following error message –

Data not available. For details please contact respective EPF Office.

I tried permutations and combinations of D’s data but to no avail. Disheartened, I then tried with my EPF Account Number and, perhaps thanks to some good karma, I thought I had some success because I got this message –

Your EPF balance has been sent through SMS on your specified mobile number. You shall receive the SMS shortly.

I did get the SMS almost immediately but was then disheartened again to see that the balance was reflected only up to 31-Mar-2011.

But then I guess some EPF data is better than no EPF data.


When I resigned from my previous job, I opted to withdraw my Employees Provident Fund (EPF) contribution. Unlike D, I don’t contribute to the Voluntary Provident Fund (VPF) — hence my EPF corpus was built on a monthly contribution of 12% of my Basic Salary plus an equal match from my employer. I filled-up the necessary application forms and submitted these as part of the exit process. This was on July 31, 2010.

I received the EPF credit in two tranches: the first on February 05, 2011 and the second on February 11, 2011. Apparently, your EPF contributions are split into two: a pension part and a provident fund part. Hence, the payout also happens in two stages.

What’s interesting, however, is the guessing game that you play in the intervening six months while you wait for your money.

  • Your employer generally doesn’t have a clue about the status of your application once they handover the forms to the applicable Provident Fund office. I’ve heard multiple versions of the processing steps at different times. Quite not sure which one’s true.

  • A good friend, who resigned a couple of weeks after I did, received a couple of status SMSes from the Provident Fund office suggesting that his forms had been processed and that the payments had been dispatched through check. I, however, never received any status SMSes.

  • Having received the lower-value pension part (through NEFT) but not the higher-value provident fund part, my friend (who’d received neither) and I spent a good couple of hours at the Bank (where we have the Savings Account into which we’d asked for the payout to happen) trying to figure out why. The Bank officials were sympathetic to our cause and extremely helpful in their investigation, but ultimately they couldn’t answer why. I received the higher-value provident fund part a week later (again, through NEFT).

  • In the interim, my friend had also managed to get someone from our previous employer to personally visit the Provident Fund office and check on our applications. We were given check numbers (they were the same for both of us!) and the amounts but we were further confused when my first credit happened over NEFT but the amount was an exact match. The Bank wasn’t sure how this was possible.

  • A couple of colleagues who’d resigned before we did told us that they’d received the full amount in a single credit — but they’d faced other issues of their own such as signature mismatches.

  • We finally decided to wait it out for a week.

Luckily the ending was a happy one — for both of us.

But why it takes six months, to begin with, is beyond my understanding.

What has your experience been?


This is a question that I’m often asked. In fact, a couple of weeks back, a colleague whose internship was recently converted into a full-time position also posed the same question:

“Starting this month, I’ll be earning a regular salary. How do I ensure that I don’t spend it all away?”

Awesome! The road to financial discipline begins when you have the right mindset. And the fact that you’re asking this question shows that you have the right mindset.

I wish I’d asked this question when I started my career. Because, the problem with newly found financial freedom is financial indiscipline — the desire to spend it all away. And I did spend it all away. Four years into my career, I seriously wondered where all that money went and I didn’t have an answer. I wish I was financially disciplined.

In retrospect, I believe the trick to learning financial discipline when you’re beginning your career is to ensure that your money gets automatically saved each month even before it reaches your hand. When you can’t touch it, you can’t spend it.

Now, how do you do that? I’d recommend two options to begin with.

  • Contribute fully to the Employees’ Provident Fund (EPF) and optionally as much as you can to the Voluntary Provident Fund (VPF).

If your employer offers you an option to avail the EPF facility as part of your compensation, I’d strongly recommend that you take up this option. I’ve written quite a bit about the EPF in the past and I’d like to particularly highlight this point.

A quick example:

Suppose your Basic Salary is Rs 10,000 per month. When you opt for the EPF, you automatically save a minimum of Rs 2,400 each month (12% of your Basic Salary that’s directly deducted from your take home pay plus an equal match from your employer) in your EPF account. For the amount that you contribute, the deduction from your salary happens even before your salary reaches you. Simply put, you can’t spend this amount. Passive financial discipline. It’s what they call paying yourself first elsewhere.

And you could even bump-up your contribution by opting for the VPF. A strong case in point: D has been contributing an additional 8% to the VPF since she started her career almost four-and-a-half years ago. So she’s been automatically unable to spend 20% of her Basic Salary (or 8% of her Gross Salary) each month.

Automatic financial discipline. Trust me. This method simply works.

  • Start a Recurring Deposit (RD) for one year.

While passive financial discipline is good, it’s great to learn some active financial discipline as well. To do that, open a one-year RD with the bank where you have your salary account. Fix a monthly contribution that you think is doable (I’d recommend 20% of your monthly Gross Salary) and transfer this amount each month into the RD as soon as you receive your salary. Though I’d prefer that you do this manually each month (remember, you’re learning active financial discipline), if your bank allows you to automate these monthly transfers between your salary account and the RD account, set the transfer to happen a day after the expected monthly date of credit of your salary.

Do this for one year and you’ll have learned financial discipline.

12% of your Basic Salary (or 4.8% of your Gross Salary) into the EPF plus another 20% of your Gross Salary into the RD. That’s 25% of your Gross Salary saved each month. Enough to inculcate financial discipline?

What do you think?


Tweets on 2010-09-29

by Vinaya HS on September 29, 2010

in Finance

A reader asks,

Recently, there was a hike in the EPF (Employee Provident fund) interest rate. Will this rate be applicable for the PPF (Public Provident Fund) too? Please publish this question on your blog as it would clarify facts for a lot of investors like myself.

The answer is NO — currently there is no link between the administered interest rates for the EPF and the PPF. That said, this article is perhaps the best analysis I’ve come across on the proposed hike.


Ask the Readers: Withdraw or Transfer Your EPF Corpus?

by Vinaya HS on September 27, 2010

in Finance

Thought I’d ask this question that many of us face when changing jobs. The choice becomes all the more difficult especially when you know that your EPF corpus is a significant amount.


In response to my post on why you shouldn’t opt for a decrease in your Employee Provident Fund contributions in lieu of an increase in your take home pay, reader Siva commented:

But, in need, it’s always a problem to get back your money from the Government PF office. When a friend wanted to start on his own, he had big troubles while withdrawing the PF money from his previous employments. In fact, it was a nightmarish experience for him at the Government PF office.

I’ve heard similar stories in the past and hence thought I’d open up this question for you to answer. How easy (or difficult) is it to withdraw your EPF balance?

Do you have an experience to share?


One of the suggestions that came up during an office discussion about the effects of the recent circular issued by the Central Board for Direct Taxes (CBDT) was:

Employees whose basic salary is greater than INR 6,500 per month can opt to receive an employee provident fund amount limited to 12% of INR 6,500 i.e. INR 780 per month. This would increase the take home pay for such employees.

Though this suggestions looks attractive at first sight, there are several drawbacks.

  • You loose your employer’s matching contribution. If your basic salary is a significant amount, you stand to loose a significant amount of free money.
  • You loose the income tax exemption benefits that you would have otherwise gained with a higher employee provident fund contribution. In other words, your take home pay doesn’t really increase as much as you expect it to.
  • You loose the benefit of automatic savings — each month.

Unless you desperately need the few — if any — extra rupees each month, it’s always a bad idea to opt for a decrease in your EPF contributions in lieu of a [hypothetical] increase in your take home pay. And remember, the truth always lies in the calculations.

What do you think?

Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment to submit your tip. And, as always, do spread the word if you find this useful.

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Tweets on 2009-06-24

by Vinaya HS on June 24, 2009

in Finance

Yesterday, I talked about why it makes sense to have a higher basic pay as part of your salary? My friend and guest blogger Shilpa immediately took my calculations forward in order to determine what difference the basic pay would make to your take home salary.

Grab a copy of her calculations.

What do you think?

Thanks Shilpa. Do you still claim to know zilch about financial planning?


Recently, at work, there was a restructuring of our salary components. Many concerns were raised when the outside consultants proposed that Basic pay be at least 50% of the Gross pay — it was finally fixed at 40%. I think we lost out. Here’s the math (all figures are per annum).

Suppose your Gross pay is Rs 500,000. At 50%, your Basic pay is Rs 500,000 x 50% = Rs 250,000. At 12%, your contribution to EPF is Rs 250,000 x 12% = Rs 30,000 (and which carries over fully as income tax savings). Your employer contributes an equal amount, taking your total contribution to EPF to Rs 60,000.

On the other hand,

At 40%, your Basic pay is Rs 500,000 x 40% = Rs 200,000. At 12%, your contribution to EPF is Rs 200,000 x 12% = Rs 24,000 (and which carries over fully as income tax savings). Your employer contributes an equal amount, taking your total contribution to EPF to Rs 48,000.

Observe closely. That’s a straight Rs 12,000 less in your automatic savings. You just saved your employer Rs 6,000. You also lost Rs 6,000 as part of your automatic income tax savings.

In general, the higher the Basic pay, the higher are these figures. Employer’s contribution to EPF is akin to free money. Why would you ever want to lose out on that?

And the gains? Rs 500 extra in your pocket each month.

Which option would you choose?

Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment to submit your tip. And, as always, do spread the word if you find this useful.


This is a guest post from Shilpa at Under the Rainbow. Though Shilpa claims that “she knows zilch about financial planning,” her post below proves the opposite. This story-style post on personal finance is the first of its kind on this blog and is the perfect complement to my posts on EPF.

In 1993, Mr. and Mrs. Parasher, aged 45 and 43 respectively, both government employees had just paid off their home loan. They had three children — a son studying in class eight and twin daughters studying in class five. Although Mr. Parasher was setting aside small amounts for retirement for some time, it was now that he thought is the right time to start serious retirement planning.

At that point, Mr. Parasher’s basic pay was about Rs 5,000 per month. 12% of his basic was being cut from his monthly gross towards EPF, his company was contributing an equal amount, with the total contributions being compounded at 8-9% every year (variable annually).

The first step Mr. Parasher took to secure his retired life was to voluntarily contribute to his EPF account over and above the standard 12%. He increased his contribution to EPF to about 18% (12% EPF + 6% VPF) of his basic. The company still contributed 12% of the basic. With time came promotions and salary hikes. He took advantage of this and gradually increased his VPF percentage.

In 2000, Mrs. Parasher took a voluntary retirement from service and that fetched her a sum of rupees seven lakhs. At that time, their son was pursuing Engineering degree and the daughters were still in school. The Parashers set aside this money for their daughters’ education and marriage.

Early last year, in 2008, Mr. Parasher retired. At that time, his basic pay was about Rs 25,000 per month and his VPF contribution was about 80% of the basic. He now draws a pension amount of over Rs 22,000 a month — good enough to lead a decent lifestyle.

VPF or Voluntary Provident Fund is not applicable only to pensionable jobs. Since the PF interest is compounded annually, it is a good idea to contribute over and above the EPF and transfer the account when you move across companies. You will have a sizable sum at the end of your work life.

Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment to submit your tip. And, as always, do spread the word if you find this useful.


This post is the result of a conversation I recently had with a reader.

If your employer offers you the option to avail of Employees’ Provident Fund (EPF) facility as part of your salary package, I’d strongly recommend that you take up this option. Often, employers make salary offers which compare your salary package with and without the EPF option. The package without the EPF option is deceptively alluring since it always shows a higher monthly gross — but not necessarily net (which is not shown) — pay. You shouldn’t jump up and choose this option simply by looking at the illustrative (and often illusory) gross figures.

So, what do you gain by opting for the EPF facility?

  • You contribute 12% of your monthly basic each month. Your employer also contributes an equal amount each month. That’s 24% of your monthly basic saved each month!
  • The total contribution earns 8.50% per annum compounded (interest rates are decided each year though).
  • Your annual contribution (i.e. 12% of your monthly basic x 12 months) automatically qualifies for income-tax exemption under Section 80C.
  • When you change jobs, you can choose to withdraw the accumulated balance (takes a few months for the amount to be credited) or you can transfer the accumulated balance into the account opened by your new employer.

For me, the automatic savings each month is good enough a reason to opt for this facility. Over a period of few years, this can grow into quite a substantial sum. I doubt if I’d voluntarily save this much money!

What do you think? What has your experience been?

Update: February 25, 2008

Below is a continually updated list of EPF-related queries which are answered in leading financial magazines such as Outlook Money and Money Today.

From Money Today, March 05, 2009 — Page 06

Q: I have been working with an MNC for the past three years. Now, the company is shutting down and I am moving to a new job with a private firm. Should I withdraw the money from my provident fund or transfer the balance to my new account?

A: The taxability of the provident fund amount withdrawn depends on the duration for which the employee contributes to it. If he has worked for more than five years with the same company, the amount withdrawn from the provident fund is exempt from tax. If he has worked for less than five years, the entire amount withdrawn is taxable. As you have been with the firm for only three years, it is advisable to transfer the balance to your new employer. This will help consolidate your provident fund money and you will not have to pay any tax.

Tip Tuesdays is my initiative to share practical personal finance tips — every Tuesday. I’d be delighted if you could share a tip or two from your own experiences. Drop a comment to submit your tip. And, as always, do spread the word if you find this useful.