Provident Fund New Rules: Know about EPF-Aadhaar linking and other key changes

The Employees Provident Fund Organisation has modified many of its regulations during the past year, which members must observe beginning next year or immediately. Employees Provident Funds, or EPFs, are an important element of any corporate employee's job, and members must follow the guidelines in order to get their provident fund (PF) money on time. Furthermore, if someone does not follow the requirements, his or her PF payment may be terminated, which might be a significant financial burden. Employees Provident Fund Organisation (EPFO), a government-backed retirement agency, is a programme that saves a portion of an employee's pay as well as a portion of the employer's contribution and distributes it after retirement.

Many of the EPFO's schemes have been revised this year. PF-Aadhaar connection, the maintenance of two PF accounts for some employees, an increase in the insurance benefit under the EDLI plan, and the addition of a nominee to an employee's PF account are just a few of them. PF-Aadhaar linking, the maintenance of two PF accounts for some employees, an increase in the insurance benefit under the EDLI plan, and the addition of a nominee to an employee's PF account are some.

Provident Fund New Rules

The EPFO has made it essential to link your PF account's Universal Account Number (UAN) with Aadhaar from November 30, 2021. The EPFO had previously stated that it will take effect in June of this year. If you do not link your UAN to your Aadhaar number, you may face a variety of consequences. You will not get the employer's contribution if the accounts are not linked. Employees will also face a payment delay until the accounts are linked and the data has been validated by employers and authorities. They will also be unable to withdraw funds from their PF accounts.

Adding Nominee to PF Account

The EPFO has informed that all EPFO members must add a nominee to their PF accounts by December 31 of this year. Employees will lose out on various benefits if this is not done. According to EPFO, it is vital for subscribers to file nominations to care for their spouse, children, and parents, as well as to protect them through online PF, pension, and insurance. The purpose of filing a nomination is to ensure benefits for the PF account holder's dependents in the case of his or her death.

Two PF Accounts for Some Employees

The Central Board of Direct Taxes (CBDT) announced earlier this year a new set of rules that require individuals to have two separate Provident Fund (PF) accounts if their EPF contribution exceeds Rs 2.5 lakh in a given financial year. This took effect in September, and the two accounts now have separate taxable and non-taxable contributions. This has been put in place to ensure that the taxpayer's computations are as simple as possible. The Income-tax (25th Amendment) Rules, 2021, were used to group these new regulations.

Hike in Insurance Benefits Under EDLI Scheme

The EPFO has proposed a programme to increase insurance payouts in order to assist thousands of families of COVID-19 victims during the second wave. The maximum assurance benefit under the Employees' Deposit Linked Insurance (EDLI) programme was enhanced to Rs 7 lakh from Rs 6 lakh as a result of this. Enhanced social security is intended to be supplied to workers at no additional cost to the business, the labour ministry stated at the time. However, the minimum barrier of Rs 2.5 lakh has remained unaltered.

(Image: PTI)