The scheme of Provident Funds implies compulsory saving by the employees from their salary every month. The contribution at some stipulated rate is deducted from the salary by the employer who is also generally obliged to contribute some amount to the fund simultaneously in addition to paying regular salary. The combined amount is then invested in gilt edged securities or remitted to Provident Fund Commissioner or deposited in the bank to earn interest, which is again credited to the Provident Fund Account of the employees.
Types of Provident Funds
- Statutory Provident Funds
- Recognized Provident Funds
- Unrecognized Provident Fund
- Transferred Balance
- Approved Superannuation Funds
