Question

Which of the following is NOT true regarding Provident Fund?

1. The employee and the employer contribute every month ten per cent of the basic wages.
2. Every employee is entitled to become member of the scheme after completing one month of continuous service.
3. The accumulated amount of standing credit to an employee is payable on retirement, death or at the time of leaving service.
4. The policy issued to the employer is called master contract.

Options

• I & III

• II & III

• III & IV

• II & IV

Answer 1

I & III

Explanation:

Statement (I) is incorrect because the standard statutory contribution rate is typically 12% (not 10%) of basic wages in most cases. Statement (III) is generally true, but statement (IV) is also incorrect, as “master contract” refers to group insurance, making (I) and the combination factually flawed.