Provident Fund And

Pension
Made by –
Namrata Parvani
A3104619027
 What is
Provident fund?
Provident Fund is a compulsory, government-managed
retirement savings scheme for employees, who can
contribute a part of their savings towards their pension
fund, every month.

These monthly savings get accumulated every month,

and can be accessed as a lump sum amount at the time
of retirement, or end of employment. Since the
provident fund money consists of a large chunk of
savings, it can be used to grow your retirement corpus
easily.
the Indian government has presented Provident Funds
(PFs). In India, there are three sort of PFS, in particular
– General Provident Fund (GPF), Employees'
Provident Fund (EPF), and Public Provident Fund
(PPF).

General Provident Fund (GPF)

Employees' Provident Fund (EPF)

Public Provident Fund (PPF)

 General Provident Fund
The General Provident Fund is an investment funds
cum retirement plot, especially for government
workers. Non-government workers can't add to a GPF
account. This point capacities as a key contrast among
PPF and GPF.
An administration representative who is an individual
from GPF needs to contribute a segment of their salary
consistently till such time when he/she is utilized. The
collected corpus can be pulled back once an individual
resigns.
The balance amount in a GPF account is likewise
qualified to procure interest at a fixed rate. The central
government makes changes in the rate from time to
time. The General Provident Fund Interest Rate for the
first Quarter of Financial Year 2020 – 21 (April to
June) is set at 7.1%. In the past quarter, it was set at
7.9%.
 Tax exemptions in GPF

GPF is a tax-free retirement-cum savings scheme.

Therefore, the contributions, interest earned on it as
well as the returns from a GPF account are exempt
from tax calculations under Section 80C.
 Eligibility criteria for GPF
The accompanying people can open a record under the
General Provident Fund conspire –

Lasting government employees;

Temporary govt. employees after a consistent service

of one year or more.

Re-employed pensioners (provided such pensioners

are ineligible to Contributory Provident Fund).
 Contribution
Government workers qualified for the General
Provident Fund need to contribute at least 6% of their
compensation toward GPF. The most extreme sum an
individual can contribute rises to 100% of his/her pay.
 Public Provident Fund
Instead of General Provident Fund, PPF fills in as a reserve
funds plot for anybody ready to secure their commitments
for a drawn out period. However, like GPF, the interest rate
on ppf is changed each quarter by the Government of India.

For the first Quarter of Financial Year 2020 – 21 (April –

June) the interest rate on PPF has been set at 7.1%.
Calculation of interest under the PPF plot depends on the
lower balance in the middle of what is appeared at the fifth
day's end in a month and its the most recent day.
Consequently, any deposit that is made after the fifth of any
month is excluded from interest calculation for that month.
 Tax benefits in PPF
The stores made each year toward a PPF account are
qualified for charge exception up to Rs.1.5 lakh under
Section 80C of the Income Tax Act. Additionally, the
premium won on the parity sum in a PPF account
alongside the development esteem is absolved from tax
collection.
 Eligibility criteria for PPF
The following category of individuals can hold an
account under the Public Provident Fund –
Any resident individual who is an Indian citizen.
NRIs who opened a PPF account before leaving India.
Minors provided their guardians/parents to represent
them.
Moreover, it shall be noted that any individual cannot
hold a PPF account jointly. Neither is it allowed for
one individual to hold multiple PPF accounts.
 Contribution
A PPF account holder can just make a limit of 12
contributions in a year. An individual needs to make a
base contribution of Rs.500 every year. Nonetheless,
the greatest sum that an individual can contribute, both
for themselves and their minor, can't surpass Rs.1.5
lakh.
 Lock-in period
A PPF account should be kept up for a long time from
the date of record opening.

For example, if Rupa opened a PPF account on fifteenth

May 2020, her PPF record would develop on fifteenth
May 2035.

Upon development, an individual can choose to broaden

the lock-in period by a square of 5 years, and it tends to
be proceeded in such square length from consequently.
 Employees’ Provident Fund
Employees' Provident Fund or EPF is a mainstream reserve funds
conspire that has been presented by the EPFO under the oversight
of the Government of India.

The investment fund scheme is guided towards the salaried-class to

encourage their propensity for setting aside cash to construct a
generous retirement corpus.

The EPF conspire has taken into account more than 5 Crore people
and is coordinated by three unique Acts, in particular, the
Employees' Provident Fund Scheme Act, 1952, the Employees'
Deposit Linked Insurance Scheme Act, 1976 and the Employees'
Pension Scheme Act, 1995.
The fund is worked with money related commitment
reached out by employees and their employers every month.
Both of them broaden 12% every one of the employers'
month to month pay, as a lot of commitment towards EPF.

The fund in this manner manufactured gathers a pre-fixed

pace of interest that has been set by the Employees
Provident Fund Organization. The accrued interest on the
EPF is tax-exempt and can be pulled back without paying
for the equivalent. Employees profit a singular amount sum
on their retirement, which is comprehensive of the accrued
interest.
People can apply to benefit different online services of
EPF India by getting to the official portal. The EPF online
gateway is an easy to use stage that guarantees to keep the
flow of services transparent, effective and bother free.
 What is the qualification to turn into an
EPF India Member?
The Employee Provident Fund is open for employees of both the
Public and Private Sectors, which implies all employees can apply to
turn into an individual from EPF India.

Also, any association that employees at least 20 people is considered

subject to stretch out advantages of EPF to its employees.

At the point when a employee turns into a functioning individual of

this scheme, they are viewed as qualified to get few advantages as
Employees Provident Fund benefits, insurance benefits and pension
benefits.
 Tax benefits
In the event that an individual pulls back the equalization
sum from his/her EPF account following 5 years of
record creation, it is exempt from tax. In addition,
contributions made in an EPF account each year up to
Rs.1.5 lakh are qualified for tax exceptions under Section
80C of the Income Tax Act, 1961.

Eligibility criteria for EPF

EPF has a solitary basis, for example the representative

ought to have a place with an association that utilizes at
least 20 people.
 Contribution
On account of EPF, both the employers and employees
are needed to add to such a employee's EPF account.
The standard commitment from both is 12% of the
employer's pay (basic + dearness allowance).
However, govt. decreased the EPF contribution to 10%
for the two employers and workers from June to
August 2020.
What is Pension
Fund ?
Pension funds is a sort of investment funds conspire
where you (as an employer) contribute a little segment of
your pay/pay into an assigned investment funds plan. The
principle goal of this arrangement is to get a consistent
progression of salary after you complete your dynamic
long stretches of service.

Considering the way that inflation in the country is

increasing, the pf has become a need for all. Regardless
of whether you have a lot of reserve funds in the bank,
you may at present settle on an pension scheme on the
grounds that no one can tell when a crisis may emerge.
An pension plan will assist you with getting a pay and
backing your family when you have no other salary
source.

In India, the benefits reserves are isolated into two phases.
The principal stage is the gathering stage wherein you pay
or put resources into the benefits plan all through your
dynamic work a long time until the retirement age. When
you achieve the retirement age, the subsequent stage
starts, which is the vesting stage. In this stage, you begin
getting till the very end.
 References
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www.timesnownews.com