Provident Fund (PF) is one of the main platforms of savings in India for nearly all people working in Government, Private or Public sector organizations. It is implemented by the Employees Provident Fund Organization (EPFO) of India. Registration has to be done within One month from the date of hiring 20 employees. PF is the best way to provide social security to the employees.
Provident Fund PF is largely an employee benefit scheme prescribed by the Government which provides facilities to the employees of an organization about medical assistance, retirement, education of children, insurance support and housing. It is created with the purpose to provide financial security and stability to employees.
Contribution towards EPF
Contribution to EPF is to be done by both Employer and Employee.
Employer deducts his/her employees’ share of EPF from his/her salary.
Employer needs to deposit the amount of his/her contribution of EPF along with employees deducted share.
The Employer’s contribution to EPF would be 10% and that of employee’s would be 10% (As per reduced rate).
Why is it necessary to contribute in EPF?
The PF contribution by an employer will be tax-free.
The amount including the amount interest will be exempted from tax on withdrawal after a specific period.
Organizations can also enroll themselves voluntarily under PF laws.