Employees Provident Fund Organization (EPFO) launched Provident Fund Scheme for employees. The number of EPF subscribers continued to increase. In this scheme, the employee gets the benefit of pension and lump sum amount after retirement.
Contribution is made to PF by the company along with the employee, the benefit of which the employee gets after retirement. There are many rules of EPFO which the subscribers are not aware of.
One of these rules is related to Loyalty-cum-Life Benefit. In this, the employee gets a direct benefit of Rs 50,000. However, for this they have to fulfill the condition.
What is the condition of Loyalty-cum-Life benefit?
All PF account holders are advised to always contribute to only one EPF account. If he does this and invests continuously for 20 years, he can get the benefit of Loyalty-cum-Life benefit.
CBDT had recommended giving this benefit. CBDT had said that its benefit should be given to those PF account holders who have been contributing continuously for 20 years.
After this recommendation of CBDT, EPFO started providing this benefit. Its benefit is available to those subscribers who contribute to a PF account for 20 years. EPFO gives them an additional benefit of Rs 50,000.
Who gets how much benefit?
If the basic salary of an employee is Rs 5,000 then he gets a benefit of Rs 30,000. Whereas, those whose basic salary ranges from Rs 5,001 to Rs 10,000 get a benefit of Rs 40,000. Similarly, those whose basic salary is more than Rs 10,000, they get a benefit of Rs 50,000.
A better way to avail the Loyalty-cum-Life benefit is to continue with the same EPF account whenever you change jobs. At present, PF account transfer is automatic, still you should give information about PF account to your old employer and current employer.
Experts also advise that you should not do PF withdrawal while working. If you do this, you may suffer a loss in your retirement fund along with income tax. Apart from this, you may also suffer loss of pension benefits and loyalty.
