A provident fund is a financial safety net accumulated during an employee’s active working life to ensure financial protection upon retirement or separation from service. Contributions to this fund may come from the employee, the employer, or both. There are three main types of provident funds:

• Statutory Provident Fund
• Recognized Provident Fund
• Unrecognized Provident Fund

Unrecognized Provident Fund

An unrecognized provident fund is not governed under Part B, First Schedule of the Income Tax Ordinance, 1984 or any other applicable laws. This fund is not approved by the Commissioner of Taxes. Both the employee and employer contribute to this fund, but the interest is not included in the employee’s total income. Upon the employee’s retirement, the accumulated balance (except the employee’s contribution) is included in their total income for tax purposes.

Recognized Provident Fund

A Recognized Provident Fund is a fund that has been officially recognized by the Commissioner of Taxes in accordance with Part B of the First Schedule.

Recognition and Withdrawal Process:

• Recognition: The Commissioner shall recognize a provident fund within 45 days from receiving the application. If not done within this period, the fund is deemed recognized. The recognition may be withdrawn if the fund contravenes the conditions specified in the rules.
• Conditions: A recognized provident fund must meet specific criteria, such as employment in Bangladesh or by a Bangladesh-based employer, regular employee contributions, and trustees’ management. Withdrawals can only occur under prescribed conditions.

Conditions to Retain Recognition:

To maintain recognition, the fund must meet several conditions, including but not limited to:

• All employees must be employed in Bangladesh or by an employer with a principal place of business in Bangladesh.
• Contributions by employees must be a fixed percentage of their salary.
• The fund must be managed by trustees and not be revocable.
• The fund’s accumulated balance must be paid to the employee upon termination of employment.

Tax Exemptions:

Employees are exempt from paying tax on their contributions to a recognized provident fund, provided they do not exceed one-third of the employee’s salary for that year. Interest earned on the balance of the provident fund is also exempt from tax under certain conditions.

Provident Fund Audit by Corporate.com

Corporate.com offers specialized provident fund audit services to ensure compliance with statutory requirements and the effective operation of the provident fund. Our team of experts provides a thorough review of the fund’s operations, including contributions, payments, and investment returns.

We ensure that the provident fund is operating efficiently and meeting all legal requirements. We verify the fund’s management practices, contributions, and compliance with both tax and employment laws. This helps safeguard the interests of both employers and employees.

Our Provident Fund Audit Services Include:

1. Registration Assistance: We assist with the necessary applications and documents required for the registration of the provident fund with the Registrar of Provident Funds in Bangladesh.

2. Memorandum and Fund Rules: We help in drafting the Memorandum and Fund Rules, which include the operational guidelines of the fund.

3. Tax Compliance: We support the process of registering the provident fund with the Income Tax Authorities and ensuring full tax compliance.

4. Bookkeeping and Statutory Audit: We provide comprehensive bookkeeping services and perform statutory audits to ensure accuracy and regulatory compliance in all fund transactions.

5. Member Statements: We prepare and report the members’ statements, ensuring transparency and correct communication to all stakeholders.

6. Secretarial Services and Communication: We handle all correspondence with the authorities on matters related to the provident fund and manage secretarial services to ensure smooth operations.

7. Provident Fund Management: We assist in the management of monthly contributions, fund performance, and other related administrative functions.

Why Choose Corporate.com for Provident Fund Auditing?

At Corporate.com, we are committed to ensuring that your provident fund operates efficiently and complies with all relevant laws and regulations. Our expert team provides comprehensive audit services to verify the fund’s operations, ensure accuracy in contributions, and guarantee transparency in the management of the fund.

We understand the importance of a provident fund in securing the financial future of employees. Our goal is to provide you with peace of mind, knowing that the fund is well-managed, compliant with all regulations, and operating in the best interests of both the employees and the employer.

Contact Corporate.com today to learn more about our Provident Fund Audit services and how we can help you ensure the accuracy, compliance, and effectiveness of your provident fund operations.