Question

Distinguish between gratuity and provident fund.

Answer 1

Sr. No.	Basis of Distinction	Gratuity	Provident Fund
1.	Contributions	The employee makes no contributions.	Both the employer and the employee make regular contributions.
2.	Amount	Fifteen days' wages for every completed year of service.	Amount standing to the credit at the time of retirement.
3.	Investment	There is no specific investment.	The amount is specifically invested and earns interest.
4.	Payment	Payable only at the time of retirement.	A part of the amount can be withdrawn during service for specified purposes.