PF New Rule: PF rule changed in April, know these important changes
New PF rules: The new rule of PF (Provident Fund) has come into effect from April. If you are also planning to change job or have already changed job, then first know about this rule. Till now, at the time of changing job, one had to fill and submit the form to transfer PF money, but now this will not have to be done. Now on changing job, PF will be automatically transferred.
PF rules have changed from April
According to the new rules, if PF money is transferred on change of job, then the PF money will be transferred automatically. Form 31 will not have to be filled for this. PF money will be transferred automatically on change of job in the financial year 2024-25. That means it will come from the previous company to the current company. With this, work related to PF has become easier than before.
What is EPF?
EPF works as a savings scheme for employees working in organizations falling under the purview of the Employees’ Provident Fund Organization (EPFO). As per the EPF scheme, both the employee and the employer are required to contribute equally to the scheme. Upon retirement, the employee gets this money together which includes his own contribution, employer’s contribution and interest on both the amounts. Here we are telling you how interest on EPF is calculated.
interest calculation
Considering the basic salary and dearness allowance of an employee as Rs 15,000 and the interest rate being 8.25 percent, the interest can be calculated in this way.
Basic salary and DA = Rs 15,000
Employee contribution to EPF = 12% of Rs 15,000 = Rs 1,800
Employer’s contribution to EPF = 8.33% of Rs 15,000 = Rs 1,250
Employer’s contribution to EPF pension = 3.67% of Rs 15,000 = approximately Rs 550
Total contribution = Rs 2,350
Current interest rate = 8.25% per annum
Interest is calculated on monthly operating balance and hence interest per month = 8.5% /12 = 0.7083%
No interest on EPF in the first month
Second month contribution = Rs 2,350
Total EPF balance = Rs 4,700
Interest on EPF contribution for May = Rs 4,700 * 0.7083% = Rs 33.20
