Provident

Fund
KoyalTech Solutions.
 MEANING
A provident fund is a compulsory, government-managed retirement
savings scheme used in Singapore, India, and other developing countries.

Both the employee and employer contribute to a fund that aims to

provide financial support to the employee when they reach retirement.

A provident fund is managed by the government, with set minimum and

maximum contribution levels.

 BENEFITS

After Registration under Employee PF Act, the employee of the

company has following benefits.

EPF is divided into two parts which are provident fund and
Employee Pension Scheme.

The subscriber Contribution 12% of basic plus daily allowance

goes to the Provident Fund.

In the case of employer contribution, 8.33% goes to Employee

Pension Scheme out of 12%, rest goes to the provident fund
account.

Considering the number of years of service and the average

salary drawn by the person gets the pension.
 BENEFITS CONTINUED......

A retired person gets the lump sum EPS money along with PF.

The members who complete the age of 58 years and

completed 10 years of service without any withdrawal gets
the benefits of a pension.

Member can withdraw from this accumulations to cater to

financial exigencies in life – No need to refund unless
misused.

On resignation, the member can settle the account. The

member receives his PF contribution, Employer Contribution,
and Interest.

CONTRIBUTION UNDER EPF

SCHEME, 1952.

Employees: 12% on Basic + DA

Employer: (a) 3.67% on Basic + DA

(B)Administrative Charges: 1.10%

on Basic +DA
 FORMALITIES UNDER EPF ACT

Formalities under EPF Act Employees have been

appointed on salary (Basic+ DA or Consolidated ) of
Rs. 6500 or less or covered under the provision of the
EPF Act, right from the day of commencement of their
work. Employee can contribute more behind Rs.6500
similarly employer also at his discretion can do so
but not mandatory.

EPF Act is applicable to such of the establishments

who are engaging 20 or more persons or had
engaged 20 or more persons at any time during
calendar year.
 FORMALITIES UNDER EPF ACT

Casual workers/ Temporary workers/Probationary,

even if they had performed work even for a day, are
technically taken into account for the purpose of
assessments of strength of 20 for the purpose of
applicability of the act and are also covered under
the act. Apprentices/ Trainees are excluded from the
definition of employees.

Percentage of contribution to be deducted from

employees contribution is 12% of his salary, namely
Basic + DA , but does not include HRA, CCA, Incentive,
Bonus, Washing allowance etc.