Question

What is a Provident Fund Scheme?

Briefly explain Provident Fund.

Answer 1

1. Under the Employees' Provident Funds and Miscellaneous Provisions Act, the Central Government has established the provident fund scheme for employees.
2. Every employee is entitled to become a member of the scheme after completing three months of continuous service.
3. The employee and the employer contribute every month ten percent of the basic wages. The total contributions are invested in specified investments.
4. The accumulated amount of standing credit to an employee is payable upon retirement, death, or at the time of leaving service.
5. An employee can get advances and permanent withdrawals for construction of house, marriage of dependents and other specified purposes, like serious illness.