Provident Fund (PF)

A Provident Fund (PF) is a retirement savings scheme that is mandatory for most salaried employees in India. It is a government-managed savings scheme that aims to provide financial security to employees after they retire from work.

Under the Provident Fund scheme, both the employee and the employer make regular contributions towards a fund, which is managed by the Employees' Provident Fund Organization (EPFO). The contributions are made on a monthly basis and are calculated as a percentage of the employee's salary, with the employer contributing an equal amount as the employee.

The contributions made towards the PF are tax-deductible under the Income Tax Act, and the accumulated amount is eligible for tax-free withdrawals after a certain period of time. In addition to retirement benefits, the PF can also be used for other purposes, such as purchasing a house or paying for medical expenses.

The PF scheme also provides benefits to the employee in case of emergencies, such as illness or job loss. In such cases, the employee can withdraw a portion of their accumulated PF amount.

The PF scheme is applicable to all organizations that employ more than 20 people and is mandatory for employees earning a basic salary of up to Rs. 15,000 per month. Employees earning above this amount can voluntarily opt to contribute towards the PF scheme.

Overall, the Provident Fund is an important savings scheme for salaried employees in India, providing financial security and stability in their retirement years.