Provident Fund Advantages Types Benefits of SPF RPF UPF

In this both employee and organization should contribute money every month and it is credited to after retirement of employee with interest provided by bank. It is a good financial support and secure policy. For all government employee there is a benefit of EPF (Employment Provident Fund) which is provided by provisions act 1952.

It will give an assurance of 15000 with consent of Assistant Commissioner and employee. Under these scheme an employee get deducted 12% from his salary to EPFO (employee provident fund organization). 12% of employee will get 8.33% as pension scheme. Opening balance of employee is calculated by previous year balance + monthly contributions + total interest.

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The Overview Provident Fund

A Provident Fund (PF) is a savings scheme for workers in India. It helps them save money for when they stop working. Both the employee and their boss put a little bit of money into this fund every month. The government looks after this fund to make sure it’s safe. When workers retire, they get all the money they saved, plus extra money from the interest it earned. This way athey have some money to use when they’re older and not working.

The PF is important because it gives financial security to employees after they retire. It’s like a piggy bank that grows over time. Companies with more than 20 workers must join this scheme. Workers who earn up to Rs.15,000 a month must save in the PF. If they earn more, they can choose to save or not. The boss takes out the worker’s share from their salary and adds their own share too. Then, all this money goes into the PF account of the worker.

What are the provident Fund Types:

• Depending on different types PF are of 4 types.

• Statutory provident fund (SPF)

• Recognized provident fund (RPF)

• Unrecognized provident fund (UPF)

• Public Provident fund (SPF)

Statutory provident fund (SPF):

• pf managed by local authorities, government bodies, railways and others

• It come legal under act of act 1925

• Employee need not pay and taxes under section 80C

• He need no further tax complications not even during amount withdrawal form

Recognized pf (RPF):

• It is one of most popular fund and working in companies more than 20 employees.

• It should be approved by commissioner of income tax

• He should pay 12% of salary and it is deducted on section 80

• He should pay continuously service of 5 years

Unrecognized pf (UPF):

• Persons in this are need not pay tax

• Commissioner does not recognize funds

• It is not taxable by employee

At time of withdrawal amount will come under salary income and other taxes are implied and appled on it.

Public Pf(SPF):

This scheme is suitable for both employee and non-employee and he should contribute amount of 500 and maximum of 1.5 lakhs

• Amount should be given interest for 15 years.

• Amount earned in this are tax free.

Overview of Providunt fund

Name of Scheme	Launched by	Beneficiary	Objective	Official Website	Launched Year	Mode of Application
Employees’ Provident Fund Scheme (EPF)	Government of India	Employees in factories and other establishments	To provide financial security to employees when they retire from their job	1	1952	Online
Employees’ Deposit Linked Insurance Scheme (EDLI)	Government of India	Employees covered under EPF scheme and their nominees	To provide life insurance cover to employees and their dependents in case of death or disability of the employee	1	1976	Online
Employees’ Pension Scheme (EPS)	Government of India	Employees covered under EPF scheme and their nominees	To provide monthly pension to employees and their dependents after retirement or death of the employee	1	1995	Online
Public Provident Fund (PPF)	Government of India	Any Indian citizen above 18 years of age	To mobilize small savings by offering an investment with reasonable returns combined with income tax benefits		1968	Online or offline

Benefits Of Provident Fund

Provident funds are beneficial for many reasons. Some of them are:

• They help you to save money for your retirement and secure your future.
• provide you with a regular income after you stop working.
• offer tax benefits on your contributions and interest.
• They give you a choice of investment options and returns.
• protect you from inflation and market fluctuations.

• UAN number: it allows user to contribute and access through PF details at any time and every where

• Insurance: insurance is provided to person who are eligible

• Death: if death of a person occurs then amount should be given to family persons

• Tax free: Amount obtained in this is tax free and need not pay any taxes after income is generated.

• Emergency: At time of any emergency he can with draw money

Why Provident Fund is Important ?

Provident Fund is important because it provides many benefits to the employees, such as:

• Retirement savings: PF helps employees build a corpus for their retirement, which can be used to meet their expenses and maintain their standard of living.
• Tax benefits: PF contributions are exempt from income tax up to a certain limit. The interest earned on PF is also tax-free. This reduces the tax burden on the employees and increases their savings.
• Emergency fund: PF can be used as an emergency fund in case of financial crises, such as medical emergencies, education expenses, marriage expenses, etc. Employees can withdraw a part of their PF amount for these purposes, subject to certain conditions and limits.
• Loan facility: Employees can also take a loan against their PF amount for various purposes, such as buying a house, car, etc. The interest rate on PF loans is usually lower than other loans and the repayment is deducted from the PF account itself.
• Social security benefits: PF also provides social security benefits to the employees and their dependents in case of death, disability, or retirement. These benefits include pension, insurance, maternity leave, education subsidies, etc.

How to Open a Provident Fund Account?

To open a Provident Fund account, an employee needs to follow these steps:

• The employee needs to fill up a declaration form (Form 11) and submit it to the employer along with proof of identity @ Offand address.
• The employer will then register the employee with the EPFO and allot a unique Universal Account Number (UAN) to the employee. The UAN will links to the employee’s Aadhaar number, PAN number, bank account number, mobile number, and email id. The employee can use the UAN to access his/her EPF account online through the EPFO portal or mobile app.
• employee needs to visit any post office or authorised bank branch and fill up an application form (Form A) and submit it along with proof of identity and address. The employee will then receive a passbook and a unique PPF account number. The employee can use the passbook or the online portal to access his/her PPF account.
• Job holder does not need to do anything as the employer will automatically deduct the SPF contribution from the salary and deposit it in the SPF account. The employee can access his/her SPF account through the employer or the government department or institution.
• For account:employee needs to fill up a declaration form and submit it to the employer along with proof of identity and address. The employer will then register the employee with the RPF scheme and allot a unique RPF account number. The employee can access his/her RPF account through the employer or the trust.
• The employee does not need to do anything as the employer will deduct the UPF contribution from the salary and deposit it in the UPF account. The employee can access his/her UPF account through the employer or the trust.

How to Withdraw from a Provident Fund Account?

The contribution to a Provident Fund account depends on the type of PF scheme and the salary of the employee. The contribution rates are as follows:

• EPF account: The employee has to contribute 12% of his/her basic salary plus dearness allowance (DA) every month. The employer also has to contribute an equal amount, out of which 8.33% goes to the Employees’ Pension Scheme (EPS) and 3.67% goes to the EPF account. The employee can also opt for a higher voluntary contribution, subject to a maximum of 100% of his/her basic salary plus DA.
• For PPF account: The employee can contribute any amount between ₹ 500 and ₹ 1.5 lakh per year. The contribution can be make in lump sum or in instalments, subject to a maximum of 12 instalments per year. The employer does not contribute anything to the PPF account.
• SPF account: The employee has to contribute a fixed percentage of his/her basic salary plus DA every month, as prescribed by the government or the institution. The employer also has to contribute an equal amount to the SPF account.
• For RPF account: The employee has to contribute a fixed percentage of his/her basic salary plus DA every month, as agreed with the employer or the trust. The employer also has to contribute an equal amount to the RPF account.
• UPF account: The employee has to contribute a fixed percentage of his/her basic salary plus DA every month, as agreed with the employer or the trust. The employer also has to contribute an equal amount to the UPF account.

Types of Withdraw of Provident Funds Account?

The withdrawal from a Provident Fund account depends on the type of PF scheme and the reason for withdrawal. The withdrawal rules are as follows: @ Official Website

• When you stop working or change your job, you can take out all the money you saved in your EPF account. But there are some rules and limits for this. You can also take out some money from your EPF account for different reasons, like buying a house, paying for education, getting married, or getting medical help. But there are some rules and limits for this too. You can take out the money online or offline. For online, you need to go to the EPFO website. For offline, you need to fill two forms: Form 19 and Form 10C.
• PPF account: The employee can withdraw his/her entire PPF amount after completing 15 years of subscription, subject to certain conditions and limits. Beneficiary can also withdraw a part of his/her PPF amount after completing 6 years of subscription, subject to certain conditions and limits. The withdrawal can be done online through the NSI portal or offline by submitting Form C.

Other Information

• SPF account: Beneficiary can withdraw his/her entire SPF amount after retirement or resignation from service, subject to certain conditions and limits. Applier can also withdraw a part of his/her SPF amount for various purposes, such as housing, education, marriage, medical treatment, etc., subject to certain conditions and limits. The withdrawal can be done through the employer or the government department or institution.
• RPF account: The employee can withdraw his/her entire RPF amount after retirement or resignation from service, subject to certain conditions and limits. employee can also withdraw a part of his/her RPF amount for various purposes, such as housing, education, marriage, medical treatment, etc., subject to certain conditions and limits. The withdrawal can be done through the employer or the trust.
• UPF account: The employee can withdraw his/her entire UPF amount after retirement or resignation from service, subject to certain conditions and limits. The employee can also withdraw a part of his/her UPF amount for various purposes, such as housing, education, marriage, medical treatment, etc., subject to certain conditions and limits. The withdrawal can be done through the employer or the trust

Frequently Asked Questions