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Provident Fund Act Summary for Exam Revision

Provident Fund Act Summary for Exam Revision


Applicability of the Act:

The Act applies to every factory, engaged in industry prescribed by the Act, andemploys 20 or more persons.

The Act applies to every establishment and its departments and branches, inwhich 20 or more persons are employed. Educational Institutions are alsoconsidered as establishments.



Basic Wages:

‘Basic wages’ means all earnings by employee, paid or payable to him in cash, while onduty or paid leave.

Basic Wages does not include: 

Food Concession

Dearness Allowance

House-rent allowance

Bonus, commission or any other similar payment

Any presents made by the employer



Non-applicability of the Act:

Any registered Co-operative society employing less than 50 persons and workingwithout the aid of power.

Any Govt establishment that have a separate contributory provident fund or oldage pension.

An undertaking constituted under a separate Act.



Composition of Central Board of Trustees:

-1 Chairman

-1 Vice Chairman

-1 Central PF commissioner

-Maximum 5 officials representing CG

-Maximum 15 officials representing SG.

-10 persons representing employers

-10 persons representing employees



Interest payable by Employer

For any delay in payment of any amount, employer shall be liable to pay a simple interest at 12% p.a. or at higher rate specified in the scheme



Protection against attachment:

The amount standing to the credit of any member of PF fund-

>Shall not in any way capable of being assigned or charged

>Shall not be liable for attachment by any decree or court

>Shall not be capable of being claimed by the official assignee

>Shall be free from any debt or liability



Recovery of money from Employer:

The authorized officer shall issue a Recovery Certificate, specifying the amount due. Recovery Certificate shall be sent to the jurisdictional Recovery Officer.



Quantum of contribution:

Employee – 10% of pay (Basic + DA + Retaining allowance). Employee can make a higher contribution)

Employer – 10% of pay

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