EPF account holder? You can double your Provident Fund contribution for this long-term benefit

Who doesn't want to earn more, save more and retire rich? However, many salaried professionals are often found to be living hand to mouth and barely manage to save some bucks for investment. Many times, it has been seen that the mandatory contribution towards the Provident Fund is the only saving scores of employees have. Though it is mandatory, very few people know that they can actually double their PF contribution and earn more interest over a period of time. Many employers provide their staff with the opportunity to restructure their salary. With this tool, an employee can ask the employer to increase her or his PF contribution. While this may reduce your monthly in-hand salary, the increased contribution will boost your savings as well as help you save on taxes. 

An employee has to contribute 12per cent of his Basic salary and DA towards the PF and if he/she doubles the contribution to 24%, then the amount in the PF fund account is also doubled, helping you accumulate a large retirement corpus.

According to the rules, 12 per cent of basic salary and DA is deducted from employees' salary and a similar amount is deposited in the employee's account as the employer's contribution towards EPF and EPS.

According to AK Shukla, former assistant commissioner of  EPFO, the organisation allows an employee to increase their PF contribution. While an employee can increase his/her contribution up to 100 per cent of the Basic salary, the employer is not bound to match the employee's contribution. The extra contribution becomes the part of your EPF account. You can claim tax benefits for it under section 80C of the Income Tax Act.  

At present, the Employee Provident Fund (EPF) offers 8.65 per cent interest on deposits in the employees' PF account. Since the interest on PF is compounded, the deposited amount grows into a large fund over a period of time.