Employees Provident Fund and Miscellaneous Provisions Act 1952: Meaning, Contribution, Salary for Employees Provident Fund and Benefits and purpose of Employees Provident Fund

Employees provident fund

Meaning of provident fund:

Provident fund means the fund which is created by employer and employee together for the benefit of employee. In provident fund contributions are made by employers as well as employees and contributions are invested in investments. From the inv incomes are received and incomes are also reinvested. The total amount of provident fund will be given to employee on their retirement. This amount can be given to the family of employee on his death.

Provident Fund Contribution: Section – 6

• Employer’s contribution in the P. Fund must be at least 10% of salary of employee however the contributions may be more.
• The Employer’s contribution depends upon the will of employer
• The employee’s contribution must be at least equal to employer’s contribution however it may be more than that.
•  The contributions may be different hence the employee and the employer may contribute different amounts.

Meaning of Salary for Employees Provident Fund:

For the purpose of Employees Provident Fund Act contributions are calculated on the basis of basic salary and dearness allowance the salary does not include any other payment for the purpose of Employees Provident Fund Act.

Benefits and purpose of Employees Provident Fund and Miscellaneous Provisions Act:

Employees Provident Fund Act was passed by the parliament to provide following three benefits:

• Employee’s provident fund.
• Pension fund for employees.
• Deposit link insurance.

The Employees Provident Fund Act provides above three benefits to those employees who are covered under Employees Provident Fund Act.

Also Read:

• Applicability, Constitution of Central Board of Trustees and- Executive committee, Functions of Central Board of Trustees and Executive committee
• Pension Fund and Pension of Employees: Sec 6A
• Employee’s Deposit Link Insurance Scheme and Calculation of amount due from employer