Section 2 of The Provident Funds Act, 1925
Definitions.
In this Act, unless there is anything repugnant in the subject or context,--
- (a)"compulsory deposit" means a subscription to, or deposit in, a Provident Fund which, under the rules of the Fund, is not, until the happening of some specified contingency, repayable on demand otherwise than for the purpose of the payment of, premia in respect of a policy of life insurance, 1[or the payment of subscriptions or premia in respect of a family pension fund], and includes any contribution 2*** and any interest or increment which has accrued under the rules of the fund on any such subscription, deposit or contribution, and also any such subscription, deposit, contribution, interest or increment remaining to the credit of the subscriber or depositor after the happening of any such contingency;
- (b)"contribution" means any amount credited in a Provident Fund, by 3[any authority administering the Fund], by way of addition to, 4[a subscription to, or deposit or balance at the credit of an individual account in,] the Fund; and contributory Provident Fund means a Provident Fund the rules of which provide for the crediting of contributions;
- (c)"dependant" means any of the following relatives of - a deceased subscriber to, or a depositor in, a Provident Fund, namely, a wife, husband, parent, child, minor brother, unmarried sister and a deceased son's widow and child, and, where no parent of the subscriber or depositor is alive, a paternal grand-parent;
- (d)"Government Provident Fund means a Provident Fund, other than a Railway Provident Fund, constituted by the authority of 5 the Secretary of State, the Central Government, the Crown Representative or any State Government] for any class or classes of 6[persons in the service of the Government] or 7[of persons employed in educational institutions or employed by bodies existing solely for educational purposes,]8 and references in this Act to the Government shall be construed accordingly;]
- (e)"Provident Fund" means a fund in which subscriptions or deposits of any class or classes of employees are received and held on their individual accounts, and includes any contributions 9*** and any interest or increment accruing on such subscriptions, deposits or contributions under the rules of the Fund; 10[(f) "Railway administration" means--
- (i)any company administering a railway or tramway in 11 any part of India] either under a special Act of Parliament 12 [of the United Kingdom] or an Indian law, or under contract with the Government, or
- (ii)the manager of any railway or tramway administered by the Central Government] or by a State Government, and includes, in any case referred to in sub-clause (ii) the 13[Central Government] or the. State Government, as the case may be;]
- (g)"Railway Provident Fund" means a Provident Fund constituted by the authority of a rail Way administration for any class or classes of its employees.
Summary
- A compulsory deposit (money saved in a fund that cannot be withdrawn on demand until a specific event happens) is a subscription or deposit in a fund that is not repayable on demand until a specified event occurs, except for paying life insurance or family pension fund premiums.
- A contribution (extra money added to an account by the authority administering the fund) is any extra money added to an individual's account, and a contributory fund is one that allows these contributions.
- A dependant (a relative of a deceased subscriber who is legally eligible to receive the money) includes a wife, husband, parent, child, minor brother, unmarried sister, deceased son's widow and child, and a paternal grandparent if no parent is alive.
- A Government Provident Fund (a savings fund set up by government authority for government or educational staff, excluding railway staff) is a fund set up for employees in government service or educational institutions.
- A Provident Fund (a savings fund where employees' deposits are held in individual accounts) is any fund that receives and holds employees' deposits in individual accounts, including interest and contributions.
- A Railway Provident Fund (a savings fund set up by a railway administration for its employees) is a fund constituted by a railway administration for its employees.
Practical examples
FAQ
1. What makes a deposit a "compulsory deposit" under Section 2?
It is any subscription or deposit in a fund that cannot be withdrawn on demand until a specific event happens, except for paying life insurance or family pension fund premiums.
2. Who qualifies as a "dependant" of a deceased subscriber?
Dependants are limited to a wife, husband, parent, child, minor brother, unmarried sister, deceased son's widow and child, and a paternal grandparent if no parent is alive.
3. What is a "contributory Provident Fund"?
It is a Provident Fund where the rules allow the fund administrator to credit additional amounts, called contributions, to an employee's individual account.
4. Are educational institution funds considered Government Provident Funds?
Yes, funds set up by government authority for people employed in educational institutions or bodies existing solely for educational purposes are included.
Test yourself
1.Which of the following is NOT listed as a "dependant" in Section 2?
2.What is the only default purpose for which a compulsory deposit can be repaid on demand before a contingency?
3.What does the term "contribution" mean under Section 2?
4.If a deceased subscriber has no living parents, who among the following can be considered a dependant?
5.Which type of fund is explicitly excluded from the definition of a "Government Provident Fund"?
6.What is a "Provident Fund" under Section 2(e)?