What is Provident Fund?
A provident fund is a compulsory, government-managed retirement savings scheme used in Singapore, India, and other developing countries. The money in the fund is then held and managed by the government and eventually withdrawn by retirees or, in certain countries, their surviving families.
What is Provident Fund and its types?
Employees’ provident fund is classified into 4 categories: Statutory Provident Fund, Recognized Provident Fund, Unrecognized Provident Fund and Public Provident Fund.
Who started Provident Fund?
Employees’ Provident Fund Organisation
| Native name | कर्मचारी भविष्य निधि संगठन |
|---|---|
| Founded | 4 March 1952 |
| Headquarters | Bhavishya Nidhi Bhawan, 14, Bhikaiji Cama Place, New Delhi , India |
| Key people | Neelam Shammi Rao, Indian Social Security Service |
| AUM | ₹11 lakh crore (US$150 billion) |
What is Provident Fund example?
The employee contributes 12 percent of his or her basic salary along with the Dearness Allowance every month to the EPF account. For example: If the basic salary is Rs. 15,000 per month, the employee contribution shall be 12 % of 15000, which comes to Rs 1800/-. This amount is the employee contribution.
What is provident fund benefits?
Tax-saving – Under Section 80C of the Indian Income Tax Act, an employee’s contribution towards their PF account is deemed eligible for tax exemption. Moreover, earnings generated through EPF schemes are exempted from taxes. Such exemption can be availed up to a limit of Rs. 1.5 Lakh.
What is gratuity and PF?
Unlike employee provident fund which includes employee’s contribution, the gratuity amount is entirely paid by the employer. Gratuity amount is payable at the time of resignation, retirement /superannuation, layoff or voluntary retirement, death, retrenchment, disability or termination.
What is difference between provident fund and gratuity?
Gratuity is usually awarded in addition to other benefits payable to an employee. However gratuity is not payable during the period an employer has set up a provident fund in his establishment with at least 50% of the contribution by the employer and the remaining by employee.
How is PF deducted?
For example, if the monthly basic salary is Rs 30,000, the employee contribution towards his or her EPF would be Rs 3,600 a month (12 per cent of basic pay) while the equal amount is contributed by the employer each month.
What is difference between pension and gratuity?
Gratuity is the amount of money earned by an employee as a means of appreciation for his service to the company while pension is a certain amount paid in periodic instalments to a person after retirement.