Everyone thinks about retirement at the back of their mind. Their savings are essentially to help them out in their retirement life. To live a happy and free retirement life one has to do steady and safe investment.
EPF,VFP and PPF are a few best investment options which an employee can choose from since they offer risk free and assured returns. This article enables investors to understand the basics involved in investments, know more about PF registration for employees or UAN employee registration.
Personal Provident Fund
This is a statutory scheme initiated by the central government to provide old age financial security to employees who are self employed.Only those who contribute towards the scheme get steady, assured and risk free returns. The interest earned in the scheme are reinvested that is one can get interest earned from both amounts deposited and investment reinvested.
VPF-Voluntary Provident Fund
This helps individuals who are receiving salaries monthly save more towards their retirement despite the mandatory 12% deduction in their basic salary under the EPF.This option of VPF is accessed by salaried individuals only.
NB-This is voluntary.
EPF-Employee Provident Fund
This scheme applies to employers who have an employee base of more than 20 employees. Both the employer and the employee contribute towards the scheme. The aim of the fund is to provide stability and financial security to both parties in future. Deduction of 12% are made every month from the employee salary + dearness allowances towards the contribution of the scheme.
Difference between EPV,PPF and VPF
Legibility
- EPF-only salaried employees
- PPf-Any one can apply except NRI
- VPFi- For salaried employees only.
Investment Period
- EPF-Until retirement /resignation
- PPF-15 years extension of 5years terms
- VPF- Until resignation or retirement
Tax benefit
- EPF -Invested amount can be claimed as an exemption as under section 80C of the income tax act .Matured amount is not added in the after 5 years of service or more.
- PPF-Invested tax can be claimed as exemption as under section 80C of the income tax act .
- VPF-Invested amount is claimed as an exemption as under section 80C of the income tax act .Matured amount is not added in the after 5 years of service or more.
Withdrawal Facility
- EPF-Allowed
- PPF-Partial withdrawal
- VPF -Allowed
Loan against Investment
- EPF-available
- PPF- 50% loan allowed after completion of 6years.
- VPF-Available.
