Provident
Fund
Provident Fund is a compulsory Government
managed Social Security scheme for employees, who contribute a part of their
salary towards their retirement fund every month. These monthly savings get
accumulated every month, annually Interest is credited to the PF Account.
To calculate Provident Fund, you must add the
contributions of both the employer and employee.
According to the Rules, 12% of your PF Salary will
go towards provident fund. The company is also required to contribute the same
12%, out of which 8.33% would go towards the Employee Pension Scheme or EPS and
remaining 3.67% is credited into the PF Account.
The monthly contribution can be restricted to
PF Salary of INR 15,000/-
Salary
for PF Calculation is
Monthly Fixed Gross – Monthly HRA
The benefits of this fund are as follows:
·
Retirement
Fund – At the time of retirement accumulated contribution along with Interest
is paid.
·
Life-time
pension from the EPS for the member
·
Widow
Pension post death of member
·
Non-refundable
loan for Marriage, Higher Education, Hospitalization, construction / purchase
of site / house / apartment, Payment of Life Insurance Premium
PF Calculation on Non- Restricted wages will be:
12 % of Basic + DA
PF calculation on Restricted Wages will be:
If Basic + DA >
15000, PF = 12 % of 15000
b. If Basic + DA < 15000, PF = 12 % of (PF Wages or INR
15000 whichever is lower).