Hi ramesh,
The main difference between a pension and provident fund is the following:
Under a pension fund at least two-thirds of the final benefit must be paid as a pension for the rest of the pensioner's life. A maximum of one-third of the final benefit may be taken as cash.
Under a provident fund, the full amount of the benefit available at retirement may be taken as a lump sum cash payment, irrespective of whether the benefit is calculated on a defined benefit or a defined contribution basis.
The tax concessions for employers and members in respect of the two types of funds also differ. The employer may deduct up to 20% of the member's salary for tax purposes under both pension and provident funds. In a pension fund up to 75% of members salary is tax deductible, while there is no tax deductible benefit for the members contribution in a provident fund.
KATYANA
From India, Gurgaon
35The main difference between a pension and provident fund is the following:
Under a pension fund at least two-thirds of the final benefit must be paid as a pension for the rest of the pensioner's life. A maximum of one-third of the final benefit may be taken as cash.
Under a provident fund, the full amount of the benefit available at retirement may be taken as a lump sum cash payment, irrespective of whether the benefit is calculated on a defined benefit or a defined contribution basis.
The tax concessions for employers and members in respect of the two types of funds also differ. The employer may deduct up to 20% of the member's salary for tax purposes under both pension and provident funds. In a pension fund up to 75% of members salary is tax deductible, while there is no tax deductible benefit for the members contribution in a provident fund.
KATYANA
From India, Gurgaon
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Provident fund.zip
TN Labour Welfare Fund 2018.pdf
PROVIDENT FUND.rar