Employee’s fund means employee’s provident fund, pension or gratuity fund and profit participation fund etc.
As per the Provident Funds Act, 1924, under section 2(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 contribution and any interest or increment accruing on such subscriptions, deposits or contributions under the rules of the Fund.”
As per Bangladesh Labour Act, 2006 as amended in 2013 all companies fall within the scope of WPPF (which includes Bank) are required to provide 5% of its profit before charging such expense to their eligible employees within the stipulated time. The Bank obtained opinion from its legal advisor regarding this issue which stated that the Bank is not required to make provision for WPPF as the provision of Bangladesh Labour Act 2006 as amended contradicts with that of the Bank Company Act 1991. As such the Bank did not make any provision during the year for WPPF.
Many Organizations are now investing the fund in share markets, purchasing government bonds, shanchay pattra, FDR etc. to earn a profit and provides the profit to the employees rationally. Even, employees can take loans from that fund and repay the loan amount with interest which will be added with his individual provident fund account.
As provident fund and gratuity fund mamagement has become a prerequisite of attracting and retaining employees, it has created an added load on organizations for accounting and administering such funds. Now-a-days, many organizations are maintaining separate account for these funds. Even many organizations are doing audit work for making it clear to the employees and workers.
To get some tax benefits, an organization or a company should make authorized the provident fund by the government. Only a recognized provident fund can get a tax benefit or exemption during the tax calculation. As the employee is already paying tax on his income, he is liable to pay tax on the amount of recognized provident fund that he will receive at the time of receiving the money.
We, FM Consulting International, are providing professional advice to the management of organization and fund trustees regarding the management of investments, profitable investment opportunities, holding trustee meetings in compliance with the trust deed and other compliance issues regarding the employees fund management. We, FM Consulting International, are committed to provide relevant documents, information and clarifications during external audit at the end of a financial year to ensure that such audit can be finalized within a reasonable time.