What is Employees Provident Fund in India
As per the statutes of the Indian government, a person upon joining an organization which is covered under the provisions of the Employee’s Provident fund and miscellaneous provision act 1952, would immediately be considered to be covered under the Employees provident fund scheme (1952) or the Employees deposit linked insurance scheme (1976).
As per the Act, all members would have to contribute a minimum of 10% of his basic pay, DA and retaining allowance or 12% of his basic pay in case DA and retaining allowance is not a part of his or her salary. This is as per the voluntary Provident fund rules.
But in case the person chooses to increase his or her savings through the Provident fund scheme, he or she would be eligible to do the same to any amount desired by the person up to a maximum of 100% of his or her basic salary.
Provident Fund Rules
As per the contributory provident fund rules the employer is also supposed to contribute an equal amount of money towards the employees provident fund. But in case the person chooses to opt for an enhanced rate of savings the employer would not be obligated to contribute towards the same at an enhanced rate. The same 10% or 12% rate would be applicable to the employer as the case may be.
It is mandatory for all the members of the Employees provident fund scheme to put in the name or names of his or her family members as nominees to the Employees provident fund account. Thus when the person leaves the organization or upon the death of the person as the case may be the member himself or his nominated people would be getting the benefits of the contributions to the Employees provident fund including all the interest accrued by it during the tenure it was being maintained.