Types of Provident Funds in India – PPF, EPF, SPF and UPF

In India we have different types of provident funds which is created to address needs of different section of people. In this article we will be looking into these different type of provident funds.

Employee Provident Fund or EPF

Any person who has employed 20 or more employees in an organization, is under an obligation to register himself under the Provident Fund Act, 1952 and starts a Provident Fund scheme for the employees in his organization after three years of its establishment.

However if the employer wants, such scheme can be started even though the employee is less than 20 or commencement of business is less than three years.

Employer also has a choice to join government’s scheme or can start his own PF scheme after getting approval from PF commissioner and from Commissioner of income tax.

EPF or Employee Provident Fund is one of the popular scheme managed by government of India which is created for the benefit of those who are into the payroll of a company i.e. in employment.

Every month certain specified sum based on the basic pay and dearness allowance of employee is deducted by the employer from employee’s salary as his contribution to get it invested in EPF account of employee.

Employer also contributes equal percentage of salary to the EPF account created in the name of employee.

Both contributions from employee and employer are invested and interest earned on these is credited to the Employee Provident Fund account every year.

At the time of retirement, termination or resignation from employment, the accumulated amount can be withdrawn by the employee if conditions related to the scheme are satisfied.

Statutory provident fund or SPF

SPF or Statutory Provident Fund is another type which is only meant for Government or Semi-Government employees, university or educational institutions affiliated to a university established under the statue or other specified institution. This scheme is set up under the Provident Fund Act, 1925.

Types of Provident Fund in India

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Unrecognized provident fund

It’s a scheme where you don’t have an approval from the PF commissioner or from the commissioner of income tax.

Public provident fund (PPF)

PPF is covered under the Public Provident Fund Act, 1968. Any public whether in employment or not, may contribute to Public Provident fund scheme.

Employee has an option to contribute to PPF in addition to any of the above discussed PF schemes. A self employed person can have his account opened under PPF scheme in any branch of post office or in any bank like SBI, ICICI or HDFC and start contributing to it.

As decided the minimum contribution under this scheme is Rs. 500 and Maximum Rs. 1, 50, 000 per year. The payment made to PPF account and the interest obtained can be withdrawn after a period of 15 years. The applicant has an option of extending this scheme for another 5 years term at the end of 15 years period.

The rate of interest with effect from 1st April 2013 is 8.7% per annum

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

Reader Comments

  1. Sandipan Hore

    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.

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