Employees’ Provident Fund Organisation (EPFO) subscribers can claim up to ₹7 lakh benefit from the Employees Deposit-Linked Insurance (EDLI) scheme. The corpus comprises minimum employer contribution of 0.5% of the basic salary or a maximum of ₹75 per month for each employee. If there is no other group insurance scheme, the maximum contribution is capped at ₹15,000 per month.
EDLI contribution is subject to similar tax benefits as monthly employees’ contributions. Further, the insurance payout at time of demise if exempt from tax for your nominee(s) / legal heir. Today, we explain how you can avail the benefit with no additional charges, and file claims with the retirement organisation:
EDLI: What is the minimum and maximum payout?
Notably, eligible are auto enrolled in the EDLI scheme at no additional cost if more than 20 employees from a firm opt for it. Further, to be eligible, your basic salary must be up to ₹15,000. For calculation purposes, when your basic salary exceeds ₹15,000, the maximum benefit paid under the EDLI is capped at ₹7 lakh.
Further, minimum payout provision for nominee(s) in case a subscriber dies before completing one year of continuous service is ₹50,000 regardless of the PF account balance. It is thus important to add nomination details through the and make appropriate updates in case of marriage, childbirth or changes in nominee details.
| EPFO Scheme | Employee Contribution | Employer Contribution |
|---|---|---|
| EPF | 12% of Basic + DA | 3.67% of Basic +DA |
| EPS | N/A | 8.33% of Basic + DA |
| EDLI | N/A | 0.5% (max ₹75) |
| Source: Clear Tax | ||
What is the EDLI scheme, explained
EDLI is an insurance cover provided by the EPFO for salaried individuals hired in the private sector, in combination with the (Employees’ Provident Fund) and EPS (Employees’ Pension Scheme). Under the EDLI scheme, a subscriber’s family is eligible for a lump sum payout in case of your death during the period of service.
The extent of the payout is determined by the insured employee’s last drawn salary, with bonus amount set at ₹2.5 lakh, if deceased member was in continuous employment for 12 months prior to their death. and maximum capped at ₹7 lakh.
The is calculated as follows: 30 days x average monthly salary of the employee for the last 12 months (capped at ₹15,000). There is an additional bonus of ₹2.5 lakh, which brings the total payout to ₹7 lakh. Breakdown: ₹4,50,000 (15,000 x 30 days) + ₹2,50,000 (Bonus).
For calculation of EDLI payout, (DA) is added to the basic salary. Notably, the account remains the same and is transferred from employer to employer, similar to EPF and EPS, even when you change jobs.
Family for the purpose of the EDLI scheme is defined as your spouse, any unmarried daughters, and sons up to 25 years of age. In the event of death, the benefit is directly credited to the bank account of nominee or legal heir.
Stepwise guide: Here’s how to claim EDLI
- The claimant must fill and submit the EDLI Form 5 IF with signature and certification of the .
- If there is no employer or the signature of the employer cannot be obtained, the form must be attested by either a bank manager (in whose branch the account was maintained), local MP or MLA, a Gazetted Officer, a Magistrate, a Member / Chairman / Secretary of Local Municipal Board, a Postmaster or Sub-Postmaster, a member of the regional committee of EPF or CBT.
- The claimant must submit all the along with the completed form to the regional EPF Commissioner’s Office for processing of the claim.
- The claimant can also submit Form 20 (for EPF withdrawal claim) as well as Form 10C /10D to claim all the benefits under the three schemes, EPF, EPS and EDLI).
- Once a has been made, the EPF commissioner must settle it within 30 days from date of receipt.
- In case of delay, the claimant is entitled to interest at 12% per annum till the date of actual disbursal.