Provident fund is a welfare scheme for the benefit of the employees. Under this scheme, a certain sum is detected by the employer from the employee's salary as his contribution to the Provident Fund every month. The employer also contributes a certain percentage of the salary of the employee to the provident fund. The interest earned on these investments is also credited to the provident fund account of the employees. At the time of retirement, the accumulated amount is given to the employee, if certain conditions are satisfied.
Employee Provident Fund (EPF) is a society security fund created for the purpose of providing financial security and stability during retirement. The employees will contribute a portion of their salary to this fund during his employment. The employer is also obliged to contribute an equal amount (as specified by the Act) towards EPF of the employees. The primary purpose of PF fund is to help an employee save a fraction of his salary every month so that he can use the same in the event that the employee is temporarily or no longer fit to work or at retirement.
Companies which have employee strength of 20 or more are required to be registered with PF Department. The capacity of 20 includes contract employees like housekeeping, security or other contractual workers in the business. Those companies which do not have the endorsed number of employees but willing to register themselves to provide the advantages of Provident Fund to their employees can register voluntarily with the Regional Provident Fund Office. Registration has to be done within One month from the date of hiring 20 employees. Any delay may result in a penalty.