What is Provident Fund Registration?
Provident fund or employee provident fund is another name for a pension fund that is governed by the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Its purpose is to provide employees with lump-sum payments at the time of exit from their place of employment. The Employees’ Provident Fund Organization (EPFO) is the government body corporate that regulates the law and the scheme of EPF. Provident fund registration is mandatory for all the establishments having 20 or more employees. An establishment having less than 20 employees can register themselves voluntarily under the Act.
Employees can save a considerable amount of money through PF over the period of time. Along with additional contribution from the employers, employees also stand to gain higher returns with interest on the accumulated fund.
PF is widely accepted as tax-saving investments. PF Investment is eligible for deduction under section 80C and reduces the taxability of employee. An employee can invest up to 1.5 lakh each year in PF with tax-free proceeds at retirement.