What is the Provident Fund Act?

What is the Provident Fund Act?

19 OF 1925 1 [ 27th August, 1925.] An Act to amend and consolidate the law relating to Government and other Provident Funds. (1) This Act may be called the Provident Funds Act, 1925 . (2) It extends to the whole of India 2 except the State of Jammu and Kashmir] 3 .

What is provident fund law in Pakistan?

Statutory Provident Funds, which are set up under the Provident Fund Act, 1925 and is maintained by the Government, semi Government organizations, local authorities and other such institutions. Payments from such funds does not need recognitions from the Commissioner Inland Revenue and are exempted from Income Tax.

Who is eligible for EPF scheme?

Any salaried employee with a monthly income of less than 15,000 INR needs to compulsorily be a member of the EPF. An employee with a monthly income higher than INR 15,000 (the current prescribed limit) is eligible to become a member of the EPF if he/she gets approval from the Assistant PF Commissioner and employer.

What is the minimum provident fund?

Employer’s Contribution towards EPF The minimum amount of contribution to be made by the employer is set at a rate of 12% of Rs. 15,000 (although they can voluntarily contribute more). This amount equals Rs. 1,800 per month.

How PF is calculated on salary?

For EPF, an employee contributes 12 per cent of the basic salary while the employer contributes 8.33 per cent towards Employees’ Pension Scheme and 3.67 per cent to employees’ EPF. The total of the employee and employer contribution is deposited in a fund created with the Employee Provident Fund Organization.

How is Provident Fund calculated?

Calculation of EPF Contribution made by the employee equals 12% of his/her Basic Pay plus Dearness Allowance (DA). When the Basic Pay + DA is less than or equal to Rs 15000, the employee contribution is 12% of Basic Pay + DA, whereas the employer contribution is 3.67% of the Basic Pay + DA.

What is provident fund in salary in Pakistan?

What is provident fund? LUM Employee Contributory Provident fund (LECPF) is a post retirement benefit created by employer for its employee, both employee and employers contribute to the fund at the rate of 10% of basic salary of the employee.

What is provident fund in salary?

The provident fund is a combined contribution from you as well as your employer that is deducted from your salary every month and put away in a PF account where it grows into a sizeable sum that you can avail after retirement.

Who is not eligible for provident fund?

EPF eligibility criteria If you are drawing a salary higher than Rs. 15,000 per month, you are termed a non-eligible employee and it is not mandatory for you to become a member of the EPF, although you can still register with the consent of your employer and approval from the Assistant PF Commissioner.

How is provident fund calculated?

How is PF amount calculated?

You and your employer need to transfer 10% or 12% of your basic salary to contribute towards EPF. However, if you are a woman, you only need to contribute 8% of your basic salary for the first three years. During this period, your employer’s EPF contribution will remain 12%.

How gratuity is calculated?

The calculation for this is: Gratuity = Average salary (basic + DA) * ½ * Number of service years. In this case, the service years are not rounded off to the next number. So if you have a service of 12 years and 10 months, you get gratuity for 12 years and not 13 years.