PVS (Prashant V Shah)

– Authorized Education Provider of FPSB Ltd. (CFP Coaching and Study Material)

  • Join 796 other subscribers
  • Contact for Coaching and Study Material

    Prashant V Shah

    Ph: 92274 08080

    Email: pvs.cfp@gmail.com

  • Content to Purchase

    Study Texts with Pre-recorded sessions:

    Investment Planning Specialist

    Retirement and Tax Planning Specialist

    Insurance and Estate Planning

    CWM Level -2

  • Upcoming Batch


    Online Batch: August 2021

    Thursday: 7 pm to 9 pm Saturday: 7 pm to 9 pm
    Sunday: 11 am to 1 pm
    Fees: Rs.60,000

    Weekday Batch: July 2021

    Monday to Thursday: 4 pm to 6 pm
    Fees: Rs.75,000

    Duration: 8 months to 12 months


    Online Batch:

    Saturday 5 pm to 7 pm

    Sunday 9 am to 11 am

    Fees: 50,000

    Weekday Batch:

    Monday to Thursday: 2 pm to 4 pm

    Fees: 50,000



  • Blog Stats

    • 786,127 hits

Defined Contribution Plans – Employees’ Provident Fund

Posted by Prashant Shah on March 17, 2011

Under the defined contribution plan contribution of employer and employee is defined. This plan seeks and runs on the contribution as per agreement and makes available the accumulated balance at the end of period. These plans have offered better transparency and portability to employees and employer and meets the changing corporate world.
Employees’ Provident Fund and Miscellaneous Provisions Act,1952

 Applicable to whom?

  1. Every establishment which is a factory and 20 or more persons employed
  2. Any other establishment with more than 20 employees
  3. Other establishment as the central Government may notify

Employee Eligibility:

  • Employed through a contractor
  • Engaged as an apprentice, not being an apprentice engaged under the Apprentice Act, 1961

Once the Act applies to any establishment, it continues to apply even if the number of employees working there falls below 20 there

Employee Coverage:

The scheme excludes any employee who is:

  1. A casual employee
  2. An employee whose pay is more than Rs. 6500 per month
  3. An employee who is drawing pay of more than Rs. 6500 can become member with permission of Assistant PF Commissioner.
  4. A person who is already a member continues to be a ‘member’ even if his pay exceeds Rs. 6500.
  1. The employee contributes 12% of
  2. Basic wages + DA + Cash value of any food concession + Retaining allowance
  3. Retaining Allowance: Allowance paid to an employee for retaining his service when establishment is not working
  4. The rate of contribution is 10% in case of certain establishment like sick industrial company etc

 Allocation of Contribution:



  1. The interest is credited to member’s account on monthly running balance basis
  2. Currently the rate of interest is 8.5%
  3. The interest rate is declared every year during March/April by central Government in consultation with Central Board of Trustees of PF


  1. Employee’s contribution is allowed u/s 80C
  2. Employer’s contribution is excess of 12% forms a part in gross salary
  3. Interest up to 8.5% is exempt from tax
  4. Any excess interest above such limit forms a part in gross salary


Amount can be withdrawn in full

    1. On retirement
    2. On retirement on account of permanent incapacity to work
    3. Immediately before migration from India for permanent settlement
    4. On termination of service in case of mass or individual retrenchment
    5. On VRS
    6. After 2 months of resignation, in case of no employment

Advance from the Fund:

    1. Purchase of dwelling site
    2. Construction of dwelling house
    3. Buying of dwelling house
    4. For illness of member of his family
    5. For marriage
    6. Property damage due to natural calamity etc.

2 Responses to “Defined Contribution Plans – Employees’ Provident Fund”

  1. s n rao said

    Working in psu and My retirement due 30-11-2014. Before that I want to withdraw 90% PF to utilise the amt.towards purchase of flat. Shall I commute 1/3rd pension. Pl.advise me.

    • I would request Prashant sir, R varadarajan and Vinayak to Advice on this so that new comers like me and many others to have some Idea about advising. As this candidate is planning to Purchase a house which he can rent for future income. Further he decides to withdraw 90% of PF, that means there will be some amount in Savings that will take care for Post Retirement Income.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: