• Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Your Finance Book

Income Tax | Investing | Stock Market

  • Stocks
    • 10 reasons why share prices decline in the stock market
    • What to look for in growth investing strategy for better return
    • 10 things you must understand before buying stocks
    • Speculating Vs Investing Vs Saving
    • A beginner’s guide to understand stock’s value – Explained with examples
    • Mutual Fund Basics
  • GST
    • GST registration in India – all you need to know
    • Tax invoice in GST-A complete beginner’s guide for taxpayers
    • Input tax credit in GST – A beginners guide to claim ITC
    • What is inter-state supply of goods and/or services under GST
    • What is intra-state supply of goods and/or services under GST
  • Income tax
  • Tax Rates
  • ITR Due dates
  • About Us
  • Privacy Policy
  • Disclaimer
  • Terms of Use and Policies
  • Contact Us
Home / Finance / Understanding the Different Types of Provident Funds in India: EPF, PPF, and More

Understanding the Different Types of Provident Funds in India: EPF, PPF, and More

Last updated on December 3, 2024 by Editorial Staff

Share
Share on Facebook
Pin
Pin this
Share
Share this
Share
Share on LinkedIn

In India, there are different types of provident funds designed to meet the needs of various groups of people. In this article, we will explore the most common types of provident fund schemes.

Employee Provident Fund (EPF)

The Employee Provident Fund (EPF) is a savings scheme for employees in India. It is mandatory for companies with 20 or more employees to register under the Provident Fund Act, 1952 and start an EPF scheme after three years of operation. However, an employer can start the EPF scheme earlier, even if they have fewer than 20 employees or have been in business for less than three years.

Employers can either join the government’s EPF scheme or create their own, with approval from the Provident Fund Commissioner and the Income Tax Commissioner.

Each month, a part of the employee’s salary, based on basic pay and dearness allowance, is deducted by the employer and deposited into the employee’s EPF account. The employer also contributes the same amount to the employee’s EPF account. Both the employee’s and employer’s contributions earn interest, which is credited to the account yearly.

When the employee retires, resigns, or leaves the company, they can withdraw the accumulated amount, provided they meet the conditions set by the EPF scheme.

Statutory provident fund or SPF

The Statutory Provident Fund (SPF) is for government and semi-government employees, university staff, and other specific institutions. This scheme is governed by the Provident Fund Act, 1925.

Unlike the EPF, which is meant for employees in private companies, the SPF is for those working in the public sector or government-related organizations.

Also Read:

  • When you can withdraw balance from your EPF account
  • What to do if employer not depositing to your EPF Account
  • How to withdraw money from your EPF Account without employer’s signature
  • How to know your EPF balance Online
  • How to withdraw balance from your EPF account
  • How to check your EPF claim status online
  • How to check your EPF balance online

Unrecognized provident fund

An Unrecognized Provident Fund is a scheme where the employer does not have approval from the Provident Fund Commissioner or the Income Tax Commissioner. This type of fund does not have the same official status as the EPF or SPF.

Public provident fund (PPF)

The Public Provident Fund (PPF) is open to all Indian citizens, whether employed or self-employed. It is governed by the Public Provident Fund Act, 1968. People can contribute to the PPF in addition to any other provident fund schemes they are part of.

A person can open a PPF account at any post office or participating bank (such as SBI, ICICI, or HDFC). The minimum annual contribution to the PPF is Rs. 500, and the maximum is Rs. 1,50,000. The amount invested in the PPF and the interest earned can be withdrawn after 15 years, with the option to extend the account for another 5 years.

Key Benefits of Investing in PPF:

  • Tax benefits: Contributions to the PPF are eligible for tax deductions under Section 80C of the Income Tax Act.
  • Long-term savings: PPF is a secure, long-term investment option for those looking to save for retirement or other long-term goals.

You can open a PPF account at banks like SBI or in any post office. The process is simple, and you will need to submit identification documents and proof of address.

Whether you are an employee, government worker, or self-employed, there is a provident fund scheme designed to help you save for the future.

  • How to open a PPF account with SBI
  • Top 10 reasons of investing in PPF scheme
  • Common Frequently asked questions on PPF
  • How to get paid from PPF on death of a subscriber
  • How to withdraw money from your PPF account
  • How to invest in PPF scheme
  • Tax benefits on investing in PPF
Share
Share on Facebook
Pin
Pin this
Share
Share this
Share
Share on LinkedIn

Categories: Finance Tags: What is employee provident fund or EPF, What is Public Provident Fund or PPF

About the Author

Editorial Staff at Yourfinancebook.com is a team of finance professionals. The team has more than a decade experience in taxation, stock market and personal finance.

Reader Interactions

Comments

  1. Harshini says

    August 14, 2016 at 1:37 pm

    This site is good to learn about pf

  2. Sandipan Hore says

    August 30, 2015 at 5:02 pm

    I had been working with Nuclear Power Corporation of India limited for about 2 years 4 months. The organisation is administered under EPF Act 1925. On resignation the NPCIL refused to provide me employers share of PF stating that I had not completed 5 years of continuous service to NPCIL. This I feel is not as per rules of the land. I request for kind advise in this regard.

Primary Sidebar

Financial Ratios

  • The 5 Best Investing Books for Beginners
  • Accounting tools you can use to choose a winning stocks
  • What are the tools and techniques used in financial statements analysis
  • Can Price to earnings – P/E ratio be used for stock investing
  • Why Price earnings to growth – PEG is used by investors
  • How Earnings per Share or EPS can help you
  • How to use debt to equity – D/E ratio
  • What is Interest coverage ratio

Don’t see a topic? Search our entire website:

Footer

Trending Now

  • What to look for in the financial statements before investing in stocks
  • How to manage fund while investing in stocks
  • A beginner’s guide to mutual fund investing
  • Why share prices move up and down in stock market
  • Price Action trading – How candlestick helps to read mass psychology

Email Newsletter

Sign up to receive email updates daily and to hear what's going on with us!

Privacy Policy

Stay In Touch With Us

  • Twitter
  • Facebook

Legal Disclaimer

The information available through this Site is provided solely for informational purposes on an “as is” basis at user’s sole risk. The information is not meant to be, and should not be construed as advice or used for investment purposes. Yourfinancebook.com does not provide tax, investment or financial services and advice. We make no guarantees … Continue Reading... about Disclaimer

Copyright © 2024 yourfinancebook.com · All Rights Reserved.