It is a scheme to which the Employee’s Provident Funds and Miscellaneous Provisions
Act, 1952 applies. According to this Act, any establishment, which employs 20 or more persons, is obligated to register under the Act and start a PF scheme for the employees in the organisation. Such scheme has to be approved by the Provident Fund Commissioner as well as the Commissioner of the Income Tax.
Employee’s contribution: rebate u/s 80C is available
Employer’s contribution: exempt up to 12% of salary, excess of 12% to be included in gross salary.
Interest on PF: exempt u/s 10 up to 9.5% p.a Interest credited in excess of 9.5% to be included in gross salary.
28th December 2007 From India, Mumbai