EPF full form: Employees Provident Fund, contributions and interest
EPF stands for Employees Provident Fund, a retirement account under the EPF Act 1952 into which you contribute 12% of basic and your employer another 12%, of which 8.33% of basic capped at ₹1,250 a month goes to the Employees Pension Scheme. The balance earns 8.25% a year and is tax free after five years of service.
FY 2026-27 figures, rules verified 3 Sep 2026. Numbers assume basic at 40% of CTC, employer PF inside CTC and ₹2,400 professional tax unless stated.
Employers can either contribute on your full basic or cap the contribution at 12% of the ₹15,000 statutory wage ceiling, which is ₹1,800 a month. Many IT services firms use the cap. Both shares appear inside CTC.
Your own contribution qualifies for section 80C under the old regime. Employer contributions above ₹7.5 lakh a year across EPF, NPS and superannuation are taxable.
A withdrawal before five years of continuous service is taxable and attracts TDS if it exceeds ₹50,000. The EPF calculator projects the corpus at retirement with the EPS diversion carved out.
See the figure for your own salary on the in hand calculator.
Questions
Related terms
- Basic salary — Basic salary is the fixed core of your pay on which provident fund, gratuity and HRA exemption are calculated, typically 40% to 50% of CTC in India.
- Gratuity — Gratuity is a lump sum an employer pays when you leave after at least five years of continuous service, calculated as 15 days of your last basic for every completed year: last monthly basic multiplied by 15/26 multiplied by years of service.
- CTC — CTC stands for cost to company: the total amount an employer spends on you in a year, including your gross salary, the employer share of provident fund, any gratuity provision, insurance premiums and sometimes the value of perks.