Cumulative Provident Fund
preet
(Querist) 16 May 2011
This query is : Resolved
Hello,
An employee open a cumulative provident account in a bank in 1992, in the name of employee and employer jointly. Now they get only 3 % interest on that amount as the reason the account is open as saving account. Now they want to transfer this amount to other provident fund account where they get 9% interest rate. How it is possible without charging any tax?
Guest
(Expert) 18 May 2011
Dear Preet,
There is no such provident fund in the name of cumulative provident fund. However, the name is Contributory Provident Fund, if the employer also contributes his share towards the fund in addition to the employee's share.
The account could be opened under the Public Provident Fund scheme, which has the higher rate of interest. The existing account will have to be closed and the amount may have to be deposited in the new account of PPF, if the account is maintainable in the organization of the Commissioner of Provident Fund.
