A savings fund to which both the employer and the employee contribute regularly, and which is given to the employee when he or she resigns or retires, is called:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Provident fund
A provident fund is a savings fund to which both the employer and the employee pay regularly. It is kept by the government and given to the employee on resigning or retiring.
Gratuity is different: the employer alone pays it at retirement for the services the employee has given.
NCERT (2026-27): Glossary: “Provident Fund – A savings fund in which both employer and employee contribute regularly in the interest of the employee. It is maintained by the government and given to the employee when he or she resigns or retires from work.” Glossary: “Gratuity – An amount of money given by the employer to the employee at the time of retirement for services rendered by the employee.” |