What are the statutory pension benefits? What do they cover?
The retirement age in India is 58 years old (60 in Karnataka) under the Model Standing Orders.
There is no mandatory retirement age for employees of private businesses. Retirement ages are generally subject to mutual agreement.
Below are details of the Provident Fund:
- This is a statutory contribution (12% of basic salary and Dearness Allowance) by both employer and employee. The Provident Fund contribution for both employee and employer is part of the Cost to Company (CTC).
- The employee Provident Fund contribution is deducted from their gross salary.
- The employee Provident Fund is tax-exempt up to a maximum of INR 150,000 per annum (as of December 2022).
Can an employer make direct contributions to an employee’s private pension?
No, you may not make direct contributions to a supported employee’s private pension.