The Employee Provident Fund (EPF) is commonly known as provident fund. It is a retirement benefit scheme that is available to salaried employees. A stipulated amount is deducted from the salary of the employee and equal amount is contributed by the employer. The amount you invest is eligible for deduction under section 80C.
Employees’ Deposit Linked Insurance Scheme, 1976
Introduction: The Central Government with the motive of providing additional Social Security in the form of Life Insurance to the family of the deceased member of the Provident Fund, introduced the Employees Deposit Linked Insurance Scheme with effect from 1-8-1976 as provided under Section 6 (C) of the Employees’ Provident Fund & MP Act, 1952. The benefit under the Scheme is so devised that it acts as an incentive to the members to save more in their Provident Fund Account. As the name of the Scheme says, the benefit is linked to the amount of accumulation in the Provident Fund Account of the member.
Applicability: The Scheme applies to all the establishments to which the Employees’ Provident Fund Scheme applies.
Membership: All the members of the Employees’ Provident Fund Scheme are covered as members of the Employees’ Deposit Linked Insurance Scheme also.
Contribution: Under this Scheme, the member do not contribute any amount as contribution. However, the employer pays an amount equal to 0.5% of the total wages paid to the members as contribution.
Administrative Charges: As regards Administrative charges, the employer is required to pay an amount equal to 0.01% of the wages subject to a minimum of Rs. 2/- per month.
Exemption: (Section 17 (2A) of the Act and Para 28 of Employees’
Deposit Linked Insurance Scheme , 1976
The provisions are available as per Section 17 (2A) of the Act and para 28 (1) and 28 (4) of the Employees’ Deposit Linked Insurance Scheme, 1976 for grant of exemption to an establishment or to an employee or to a class of employees as the case may be, from the operation of all or any of the provisions of the Scheme, where the Life Assurance benefit of the Scheme in the establishment is more beneficial than the benefits provided under the statutory Scheme.
Inspection Charges: An employer of an establishment exempted from the provisions of the Employees’ Deposit Linked Insurance Scheme is required to pay inspection charges at the rate of 0.005% subject to a minimum of 1 Rupee per month.
Assurance Benefit: The benefit provided under the Employees’ Deposit Linked Insurance Scheme is called Assurance Benefit. On the death of the member while in service, the nominee or any other person entitled to receive the Provident Fund benefits will, in addition to the Provident Fund, receive the Assurance Benefit under Employees’ Deposit Linked Insurance Scheme .
Scale of Assurance Benefit: From 1-4-93 onwards the amount of Assurance Benefit payable is an amount equal to the average balance in the amount of deceased in the Fund during the preceding 12 months or during the period of his membership whichever is less, except where the average balance exceeds Rs. 25,000/- amount payable shall be Rs. 25,000/- plus 25% of the amount in excess of Rs. 25,000/- subject to a selling of Rs. 35,000/-. The Form prescribed for claiming the Assurance Benefits under the Employees’ Deposit Linked Insurance Scheme, 1976, is Form 5 (IF).
* w.e.f. 24.6.2000 the amount of benefits has been increased to Rs. 60,000/-