Main Features of Recognized Provident Fund
Provident fund is one of the many benefits which any employees of any firm enjoy. It is a compulsory, government-managed retirement savings scheme similar to the Social Security program. Recognized Provident fund is constituted under the conditioned mentioned in Part B, First schedule in the Income Tax Ordinance, 1984 and approved by the commissioner of taxes. These funds are non-government organizations where both employees and employer contribute the same amount. In order that a provident fund may receive and retain recognition, it shall satisfy the conditions set out below and any other conditions which the NBR may prescribe:
(a) All the employees shall be employed in Bangladesh or shall be employed by an employer whose principal place of business or head office is in Bangladesh. In case of exceptional situation the recognition criteria will depend on the Commissioner’s judgment.
(b) Employer must deduct a certain percentage from the salary of employee and deposit the same to the fund.
(c) Employer will also contribute the same amount as deducted from the employee.
(d) The fund will constitute taking the contribution of both the employer and employee.
(e) The fund will be managed by trustee of two or more persons.
(f) Employer will not be able to take any amount from the fund.
(g) Employer will receive the amount deposited to his account including principal and interest at the time of leaving the job.