Tag Archives: Employment

New PF (Provident Fund) Norms Announced For Expats/International Workers

There is some bad news in the offing for all Expats/International Workers, who are currently employed in India, by the EPFO(Employees Provident Fund Organization), which handles provident and pension funds for the organized sector employees in India. The existing norms have been tightened a bit. Earlier, contribution to PF (Provident Fund) and EPS (Employees Pension Scheme) was 12% of the monthly pay, this contribution was made mandatory by Indian Government in 2008. Withdrawals from these PF (Provident Fund) were permitted at the end of an expat’s employment in India. But according to these new regulations, now Expats/International Workers would be permitted to withdraw their accumulated balance only after they turn 58. Now, withdrawals are permitted only in case of Permanent Disability and Total Incapacity to work or in case of these suffering from three major diseases, Cancer, Leprosy and Tuberculosis.

However, an exemption has only been made in case of employees from three countries, Belgium, France and Germany, with which India has signed Social Security Agreements. Further details are available at:



Track your PF (Provident Fund) Claim Settlement Account Transfer Online Or On Your Mobile Phone

If you have applied for PF(Provident Fund) Account Transfer or Money Withdrawal but have grown fed up of taking rounds of government offices for Tracking the Status of account transfer and money withdrawal claims, stop worrying and cursing the government system. There is a good news for you and all PF Account Holders. Government has finally taken serious notes of the grievances of 4.72 crores subscribers of EPFO (Employee Provident Fund Organisation) and has introduced a facility by which you can track your PF(Provident Fund)  Queries Online and even on your Mobile Phone via SMS.

You will be glad to know that data of 113 PF(Provident Fund) related offices has already been digitized and the same for remaining Seven offices would be completed by March end. Once all hard-copy records are migrated to soft-copy versions, it may not be required to run around PF (Provident Offices) for status-update on your PF (Provident Fund) queries and claims. In stead, EFPO (Employee Provident Fund Organisation) subscribers will receive intimation via Short Mobile Messages (SMS) about the status of their request for Account Transfer and Claim Settlement.

In case of account transfer PF holders will get two messages. First  message will be for closing the existing PF Account followed by other one about the opening of a new PF account and the amount of money transferred from old to new account. Similarly, in Claim Settlement Requests, first SMS  would be for intimating that the EPFO (Employee Provident Fund Organisation) Office has received your application and when the claim is settled, applicant would get  another message stating the amount is credited in the specified bank account.

But all this is possible only when the applicant mentions his or her personal mobile number in the application form. But it is observed that some of the applicants are somewhat hesitant to provide their personal mobile number and hence can’t avail this Mobile Update Facility. In stead, they can make use of this facility online.

At present this process takes about a month to process any claims, because it involves manual processing of your files at multiple desks. When everything is automated and put online, we can expect things to speed up. So let’s keep our fingers crossed and see when we get the news of this upcoming facilities being made available to end-users.

PF Vs PPF Difference Between PF(Provident Fund) and PPF(Public Provident Fund)

Earning the money is one thing, to invest the money on right things is quite another. In fact, Investing money is more important than Earning. So if you have started to earn the money, you should know that what is difference between PF (Provident Fund)/EPF (Employee Provident Fund) and PPF (Public Provident Fund).

What is PF/EPF and PPF:
EPF(Employee Provident Fund)
,as its name suggests, is available to salaried employees and is a retirement benefit scheme. Whereas in PPF ( Public Provident Fund) You need not be a salaried individual.

Amount You Can Deposit :
For PF(Provident Fund), the amount is decided by the government. At present it is 12% of  an employee’s basic salary. However, if he wants to, an employee can contribute more than the stipulated amount. You can open a PPF (Public Provident Fund) account in any nationalized bank or its branches that handle PPF accounts. You can also open it at the head post office or certain selected post offices. The minimum amount to be deposited in this account is Rs 500 per year. The maximum amount you can deposit every year is Rs 70,000.

ROI (Returns On Investment):
Government body decides how much return is on offer for both these funds. For financial year 2010-2011 EPF interest rate has been announced at 9.5% annum, whereas for PPF it has been kept little less at 8 %.

How long is my money blocked?


  • PF (Provident Fund): The amount accumulated in the PF is paid at the time of retirement or resignation. Or, it can be transferred from one company to the other if one changes jobs. In case of the death of the employee, the accumulated balance is paid to the legal heir.
  • PPF (Public Provident Fund): The accumulated sum is repayable after 15 years. The entire balance can be withdrawn on maturity, that is, after 15 years of the close of the financial year in which you opened the account. It can be extended for a period of five years after that.

What is the Tax Impact ??
The amount you invest in both PF and PPF is eligible for deduction under the Rs 1,00,000 limit of Section 80C. In PF If you withdraw it before completion of five years, it is taxed whereas in PPF you pay absolutely no tax on maturity.

What if you need the money?
EPF as well as PPF  both have Premature Withdrawal and Loan Facilities available. In EPF, Premature Withdrawal is allowed only for your Daughter’s Wedding (not son or not even yours) or only if you are Buying a Home. For PPF, we can take a loan on the PPF from the third year of opening your account onwards up to the sixth year, whereas we can make complete withdrawals after it completes six years of maturity.

The reason we discussed this at length was to know the answer to a straight forward question : that is which one is better PF or PPF ?? In my opinion, PF is definitely better than PPF because in the case of PF, the employer also contributes to the fund. On the other hand there is no such contribution happening in case of PPF. The rate of interest on PF is also higher (currently 9.50%) than interest on PPF (8%). But the flip-side is, you have a longer lick-in period for your funds. So there are Pros, there are Cons. You choose, what is the best for you, after all its your own hard-earned money, isn’t it 😉