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What are the types of Provident funds?

Open uri20170510 32134 7ezpi6?1494421819 jaggu asked over 2 years ago

Hi May I know, What are the types of Provident funds?

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7 Answers
Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Surbhi answered almost 2 years ago

Types of provident fund 1. Statutory provident fund 2. Recognized provident fund 3. Unrecognized provident fund 4. Public provident fund

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 narahari answered about 2 years ago

Fund Schemes must be approved by The Commissioner of Income Tax. Unrecognised Provident Fund In an Unrecognised Provident Fund the employer and employees in an establishment together start the provident fund. However, the same may not be approved by The Commissioner of Income Tax. Since they are not recognised, they would have a different tax treatment as compared to RPFs. Public Provident Fund In a public Provident Fund, individuals are free to contribute an amount not exceeding Rs 70,000 per year by opening an account at a post office or banks like ICICI Bank and State Bank of India. PPF can serve as an excellent retirement planning tool, for those who do not come under any pension scheme. The PPF offers tax benefit under section 8OC and the interest earned is also exempt from tax. This has become an extremely popular government controlled scheme, which has a duration of 15 years with certain lock-in procedures to be followed.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 veeru answered over 2 years ago

There are different types of provident fund and you would be eligible to subscribe to them depending on your work place. The rules governing subscription and other details would vary depending on your organisation. Here are some of the different types of provident funds: Statutory provident funds Statutory Provident Funds are applicable to government bodies, universities etc. They are also known as Government Provident Funds. So employees who work for these institutions would be eligible to subscribe to them. Recognised provident fund Most of individuals working fall under this type of provident fund. This fund is applicable to an organisation which employs 20 or more employees. It's important to note that all Recognised Provident Fund Schemes must be approved by The Commissioner of Income Tax.

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Open uri20170510 32134 1c996lj?1494421732 Anil answered over 2 years ago

There are four types of Provident funds available in India. They are → Statutory Provident Fund [SPF], → Recognized Provident Fund [RPF], → Unrecognized Provident Fund [UPF] and → Public Provident Fund [PPF].

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered over 2 years ago

> Types of Provided Fund --There are different types of Provident Funds (PFs) which can be used by an individual for investment and saving purposes. The Balance of Provident Fund account (PF A/c) consists of amount invested by employee (you), amount invested by your employer and interest received on the amount invested. Types of Provident Funds : Tax Implications & Key Points **Statutory Provident Fund (SPF / GPF)** --These are maintained by Government, Semi Govt bodies, Railways, Universities, Local Authorities etc., --The contributions made by the employer are exempted from income taxes in the year in which contributions are made. --The contributions made by the employee can be claimed as tax deductions under section 80c. --Interest amount credited during the financial year is not treated as income and hence it is exempted from income tax. --The redemption amount at the time of retirement is exempted from tax. --If an employee terminates the PF account, the withdrawal amount too is exempted from taxes. **Recognized Provident Fund (RPF)** --Any establishment (business entity) which employs 20 or more employees can join RPF. Most of the individuals (who are salaried) generally contribute to this type of Provident Fund. This is one of the popular types of Employees Provident Funds (EPF). (Organizations which employ less than 20 employees can also join RPF if the employer and employees want to do so) --The business entity can either join the Govt. scheme set up by the PF Commissioner (or) the employer himself can manage the scheme by creating a PF Trust. All Recognized Provident Fund Schemes must be approved by The Commissioner of Income Tax (CIT). --Employer’s contribution in excess of 12% of salary is treated as income of the employee and is taxable. In excess of 12%, the contributions are taxable in the year of contribution. --Tax Deduction u/s. 80C is available for amount invested by the employee (up to Rs 1.5 Lakh in a Financial Year). -Interest amount earned (up to 9.5% interest rate) on PF balance (employee’s + employer’s contributions) is tax free. In excess of 9.5%, the interest on contributions is taxable as ‘salary’ in the year in which it is accrued. --Accumulated funds redeemed by the employee at the time of retirement / resignation are exempt from tax if he/she continues the service for 5 years or more. **Unrecognized Provident Fund (UPF)** --These are not recognized by Commissioner of Income Tax. --Employer’s contribution is not treated as income in the year of investment and hence not taxable in that specific year. So, it is tax free in the year of contribution. --Tax deduction under section 80c is not available on Employees contributions. --Interest earned is not treated as income in the year it is credited and hence not taxable in the year of accrual. --At the time of redemption / retirement, the employer’s contributions and interest thereon is treated as ‘salary income’ and chargeable to tax. However, employee’s contribution is not chargeable to tax. Interest on Employees contribution will be charged under income from other sources. **Public Provident Fund (PPF)** --Under PPF any individual from public, whether is in employment or not may contribute to this fund. --The minimum contribution is Rs. 500 p.a. & maximum is Rs 1.5 Lakh Rs. p.a. The amount is repayable after 15 years. --PPF can serve as an excellent retirement planning / savings tool, for those who do not come under any pension scheme. --The PPF offers tax benefit under section 8OC and the interest earned is also exempt from tax. All the eligible withdrawals are exempted from taxes.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Chirag answered over 2 years ago

**Types of Provident Funds** 1.Statutory Provident Fund (SPF / GPF) These are maintained by Government, Semi Govt bodies, Railways, Universities, Local Authorities etc., The contributions made by the employer are exempted from income taxes in the year in which contributions are made. The contributions made by the employee can be claimed as tax deductions under section 80c. Interest amount credited during the financial year is not treated as income and hence it is exempted from income tax. The redemption amount at the time of retirement is exempted from tax. If an employee terminates the PF account, the withdrawal amount too is exempted from taxes. 2.Recognized Provident Fund (RPF) Any establishment (business entity) which employs 20 or more employees can join RPF. Most of the individuals (who are salaried) generally contribute to this type of Provident Fund. This is one of the popular types of Employees Provident Funds (EPF). (Organizations which employ less than 20 employees can also join RPF if the employer and employees want to do so) The business entity can either join the Govt. scheme set up by the PF Commissioner (or) the employer himself can manage the scheme by creating a PF Trust. All Recognized Provident Fund Schemes must be approved by The Commissioner of Income Tax (CIT). Employer’s contribution in excess of 12% of salary is treated as income of the employee and is taxable. In excess of 12%, the contributions are taxable in the year of contribution. Tax Deduction u/s. 80C is available for amount invested by the employee (up to Rs 1.5 Lakh in a Financial Year). Interest amount earned (up to 9.5% interest rate) on PF balance (employee’s + employer’s contributions) is tax free. In excess of 9.5%, the interest on contributions is taxable as ‘salary’ in the year in which it is accrued. Accumulated funds redeemed by the employee at the time of retirement / resignation are exempt from tax if he/she continues the service for 5 years or more. 3.Unrecognized Provident Fund (UPF) These are not recognized by Commissioner of Income Tax. Employer’s contribution is not treated as income in the year of investment and hence not taxable in that specific year. So, it is tax free in the year of contribution. Tax deduction under section 80c is not available on Employees contributions. Interest earned is not treated as income in the year it is credited and hence not taxable in the year of accrual. At the time of redemption / retirement, the employer’s contributions and interest thereon is treated as ‘salary income’ and chargeable to tax. However, employee’s contribution is not chargeable to tax. Interest on Employees contribution will be charged under income from other sources. 4.Public Provident Fund (PPF) Under PPF any individual from public, whether is in employment or not may contribute to this fund. The minimum contribution is Rs. 500 p.a. & maximum is Rs 1.5 Lakh Rs. p.a. The amount is repayable after 15 years. PPF can serve as an excellent retirement planning / savings tool, for those who do not come under any pension scheme. The PPF offers tax benefit under section 8OC and the interest earned is also exempt from tax. All the eligible withdrawals are exempted from taxes.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 jitendra etikala answered over 2 years ago

There are different types of provident fund and you would be eligible to subscribe to them depending on your work place. The rules governing subscription and other details would vary depending on your organisation. Here are some of the different types of provident funds: Statutory provident funds Statutory Provident Funds are applicable to government bodies, universities etc. They are also known as Government Provident Funds. So employees who work for these institutions would be eligible to subscribe to them. Recognised provident fund Most of individuals working fall under this type of provident fund. This fund is applicable to an organisation which employs 20 or more employees. It's important to note that all Recognised Provident Fund Schemes must be approved by The Commissioner of Income Tax. Unrecognised Provident Fund In an Unrecognised Provident Fund the employer and employees in an establishment together start the provident fund. However, the same may not be approved by The Commissioner of Income Tax. Since they are not recognised, they would have a different tax treatment as compared to RPFs. Public Provident Fund In a public Provident Fund, individuals are free to contribute an amount not exceeding Rs 70,000 per year by opening an account at a post office or banks like ICICI Bank and State Bank of India. PPF can serve as an excellent retirement planning tool, for those who do not come under any pension scheme. The PPF offers tax benefit under section 8OC and the interest earned is also exempt from tax. This has become an extremely popular government controlled scheme, which has a duration of 15 years with certain lock-in procedures to be followed.

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