Market Secrets – Tax Saving Series – EPF vs VPF vs PPF

Market Secrets – Tax Saving Series – EPF vs VPF vs PPF

What is EPF (Employee Provident Fund)?

  • It is a pension fund which provides financial security and stability for employees in the future.
  • Employees need to contribute a portion (12%) of their salaries every month.
  • The savings are used at the time of retirement.
  • The amount earns interest and is also eligible for a tax deduction.
  • EPF is risk-free and is a good investment option for post-retirement.


Who can invest via EPF?

  • EPF is compulsory for employers who have more than 20 workers and for workers with a basic salary more than Rs. 6,291.
  • The employers also have to contribute the same amount as employees (12%).
  • Government has moved on from EPF to NPS for its employees.


What is VPF (Voluntary Provident Fund)?

  • Under this scheme, an employee can voluntarily give any percent of his or her salary to the PF account.
  • The contribution has to be more than the EPF mandate of 12%.
  • Maximum amount allowed is 100% of Basic
  • It is not an obligation to contribute towards VPF.


Who can Invest via VPF?

  • Holders of EPF account can invest in VPF
  • The amount is credited to EPF scheme account as there is no separate account for VPF
  • Interest is the same as EPF.


What is PPF (Public Provident Fund)?

  • PPF is guaranteed by the government.
  • It is a fixed income security scheme.
  • It has a special objective of giving old age financial security to the non-salaried employees.


Who can Invest via PPF?

  • Anybody can contribute to this, and it is risk-free.
  • The interest received on the subscription is compounded. You earn interest on the interest earned.
  • All the amount (investment and returns) is exempt from tax.
  • Citizens belonging to the non-salaried (self-employed) category are applicable to open a PPF account. It can be opened at a bank or in Post Office. The assured high returns are also earned.


We have compared EPF vs VPF vs PPF and explained about this in detail in the video:
https://youtu.be/tOoRnah4dQA

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