What is Provident fund?
It is social security legislation for the future benefit of employees and their dependants; in case of unfortunate incidents occurring in the future.
A salaried employee will have a monthly payment with several deductions. One of such deduction is for contribution to provident fund, which also reflects on employee’s pay slip. The funds received from employees are pooled and held by a trust.
The pooled funds often produce interest at a rate prescribed by the government. This balance keep growing with an employee’s monthly contributions, as well as the necessary annual compound interest. There are two ways by which an employee can withdraw provident fund:
- Retirement age when an employee hits the age of 58. The employee will apply for withdrawal of the provident fund via his or her employer.
- The other option is to terminate the provident fund before the retirement age. This can be done if an employee has been out of work for a period prescribed by the government, in which case employee will be entitled to withdraw 75% of the provident fund.
Who can apply?
An establishment employing 20 or more employees can apply for provident fund registration. Further, an entity can also apply for provident fund registration voluntarily.
Documents required for filing application
- Copy of PAN Card of Establishment
- Address proof of the Establishment
- Details of Directors / Partners/Proprietor along with their address proof
- Digital Signature of the Proprietor / Director / Partner
- Ownership Proof like property sale deed
- Registration Certificate of the Establishment (like sale deed, Certificate of Incorporation of Company etc)
- list of Present employees with their details