What is a Provident Fund?
A Provident Fund is a savings and investment initiative established voluntarily by both employers and employees to serve as a long-term financial reserve, primarily intended to support an employee’s retirement. The Employees Provident Fund Act, 1952 aims to provide a kind of social security to the industrial workers. The act mainly focuses on providing retirement or age-old benefits such as Provident Funds, Superannuation Pensions, Family Pensions, and Deposit-linked Insurance.
Key Takeaways:
- The Act mandates both employees and employers to contribute a certain percentage of the employee’s basic wages and dearness allowance to the Employees’ Provident Fund (EPF).
- The current contribution rate is set by the government and is subject to periodic revisions.
- Employees covered under the Act have individual Provident Fund (PF) accounts where their contributions, as well as the employer’s contributions, are deposited.
Table of Content
- Types of Provident Fund
- Employee Provident Funds, 1952
- Applicability of Provident Fund
- Eligibility Criteria for EPF
- Taxability and Withdrawal Rules of Provident Fund
- Income Tax Liability on PF Withdrawal
- Universal Account Number (UAN)
- Conclusion
- Employee Provident Funds, 1952- FAQs