Some of you might be wondering what a provident fund is. The answer is quite simple. It is a compulsory, tax certified contribution that is defined by a retirement subsidy plan which requires monthly equal input at a 12% rate of the basic salary paid to an employee by an employer.
Under the administration of the fund there are two scenarios. In that in the case of an establishment which is unexempted, the regional commissioner of the provident fund is in charge if its administration and management. In the case of excluded trust and exempt trusts the trustees board is responsible for the proper administration of the fund. When the provident amount is contributed by an employer in place of his or her employee. The 12% of the basic salary cut, 8.33% of it goes directly to the pension scheme of the employee.SPONSORED LINKS
- For do be able to withdraw the provided fund, you are required to submit the needed EPF Claim form 19.
- For the withdrawal of EPS,you are required to submit the needed for 10C
- For the transfer of the provident fund from your previous employer to your current one, you are required to submit the needed form 13.
There is a difference between an employee’s contribution to the fund and an employer’s input to the fund. This occurs in that the employees input of is12% of the basic wage, D A and the monies worth of the food allowance is applicable while the employers input is 12% of the basic wage,DA and also the monies worth of the food allowance if applicable. Out of the 12 % under the employers umbrella 8.33% goes directly to the EPS account. The remaining percentage goes to the employees account of the provident fund. Apart from allocated PF input contributions, the employer is responsible for the admin charges which are 10% of the basic charges of administration, 5% of the basic insurance charge of the developed employee link.SPONSORED LINKS
It is mandatory for the employees to make necessary contributions to the fund if their employers are covered under the Act of the provident fund. If the fund is withdrawn within the first 5 years since the contribution to the fund started. The accumulated sum of money is liable to taxation. Hence,an individual is required to make payment on the accumulation according to the tax slab.
A person is allowed to take a loan using the PF investment contribution as a security. They are only needed to fulfil the other required conditions of the Act. A person is also allowed to withdraw their contributions from the fund, provided they are able to meet the statuses put in place. If an employee wishes to contribute more than the required amount to the fund, he or she is allowed to do so, the individual isrequisite to give his or her employer the go ahead consent. There is no limit on the additional contribution.