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.
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):
These are 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 provident fund (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 provident fund (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 Provident fund (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.
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