Statutory Provident Fund – This scheme is set up under the Provident Funds Act, 1925. It is meant for government employees, universities, recognised educational Institutions, railways, etc. … Recognised Provident Fund – The Provident Fund Act, 1952 applies
to all establishments employing 20 or more employees
.
What is the difference between Recognised provident fund and statutory provident fund?
Recognised Provident Fund (RPF) as recognised by Commissioner of Income Tax under EPF and Miscellaneous Provision Act, 1952. It applies to enterprises employing at least
20
employees. … Statutory Provident Fund (SPF) is meant for employees of Government or Universities or Educational Institutes affiliated to University.
What is statutory provident fund and Recognised provident fund?
Statutory Provident Fund – This scheme is set up under the Provident Funds Act, 1925. It is meant for government employees, universities, recognised educational Institutions, railways, etc. … Recognised Provident Fund – The Provident Fund Act, 1952 applies
to all establishments employing 20 or more employees
.
What are Recognised provident fund?
Recognized Provident Fund – This fund is one which is
recognized by the Commissioner of Income-tax according to the rules and provisions
contained in the Income-tax Act. It includes a provident fund established under a scheme framed under the Employees' Provident Funds Act, 1952.
Is PPF a statutory provident fund?
Public Provident Fund (PPF)
This scheme of public provident funds is
generally available for everyone
, regardless of whether they are employed or unemployed. The minimum rate should be Rs. 500, and the maximum amount extends up to Rs 1.5 lacs. This amount is paid after 15 years.
What are the four kinds of provident funds?
Employees' provident fund is classified into 4 categories:
Statutory Provident Fund, Recognized Provident Fund, Unrecognized Provident Fund and Public Provident Fund
. Let us have a brief look on the types of funds and tax imposed on these funds.
How is a provident fund calculated?
The employee contributes
12 percent of his or her basic salary along with the Dearness Allowance every month
to the EPF account. For example: If the basic salary is Rs. 15,000 per month, the employee contribution shall be 12 % of 15000, which comes to Rs 1800/-. This amount is the employee contribution.
Where is provident fund in balance sheet?
Balance sheet
under the head “Provisions”
.
Who are exempted from EPF?
As an employer, you may be exempt from registering for the EPF scheme if
you employ fewer than 20 people in your organization
, or if most of your employees voice their consent for exemption. In the latter case, you may still be subject to certain conditions and will be required to undergo several formalities.
Is General Provident Fund taxable on retirement?
Interest earned on the provident fund corpus is tax-free and
no tax is levied at the time of withdrawal
, making it an attractive investment option. Private sector subscribers to the Employees' Provident Fund Organisation (EPFO) also have employer contributions in their retirement savings.
What is the exemption limit in case of Recognised provident fund?
Deduction under Section 80C is available. Exempt
upto 12% of Salary
. Thus Contribution made by employer exceeding 12% shall be added to employee's salary Income.
What is salary for house rent allowance purpose?
In order to calculate the HRA, the salary is defined as the sum of the basic salary, dearness allowances and any other commissions. If an employee does not receive a commission or a dearness allowance, then the HRA will be
around 40% – 50% of his/her basic salary
.
When you are PF is Recognised the balance so transferred is called?
Transferred balance of
Unrecognised Provident Fund (URPF)
when it is converted into Recognised Provident Fund: As discussed above, payment from URPF is taxable to the extent of employer's contribution and interest thereon.
Is PF better than PPF?
With EPF, you don't have to go through the hassle of depositing the money from your savings account as it is deducted directly from the salary. One drawback of EPF is that the contribution is compulsory every month. On the other hand,
PPF offers a much-needed relief as you can contribute whenever you can
.
Can I open both EPF and PPF?
Returns earned from a PPF account are exempted from tax payment while investments done in EPF qualifies for tax deduction under Section 80C of the Indian Income Tax Act, 1961. The EPF account can be accessed by only salaried individuals while
a PPF account can be opened by all
.
Is VPF better or NPS?
All these factors make pension plans from insurance companies unattractive. And this is why
the national pension scheme (NPS) is the best substitute to VPF
. You have a choice of various options like corporate bonds, government bonds or stocks and you can decide the percentage allocation to various asset classes.
