The corona pandemic has once again told people the importance of saving. If you are running with the right investment plan from the beginning, then with increasing age you do not have much problem of money. Provident funds are the savings schemes in the country that are designed in such a way that makes a reliable retirement fund.
New Delhi . The corona pandemic has once again told people the importance of saving. If you are running with the right investment plan from the beginning, then with increasing age you do not face much problem of money. Provident funds are the savings schemes in the country that are designed in such a way that makes a reliable retirement fund.
You have three big and major provident fund accounts or provident fund schemes.
Employees’ Provident Fund or EPF, General Provident Fund or GPF and Public Provident Fund or PPF are available.
Key things about these schemes (Basic definition and eligibility) –
EPF is a compulsory retirement saving option for salary earners in the organized sector. In this, equal contribution is made by both the employee and the employer.
GPF is a provident fund account, which is available only for government employees.
Public Provident Fund (PPF) is primarily a retirement focused investment plan with EEE (Exempt-Exempt-Exempt) tax status. It is not mandatory but available to all Indian citizens.
Interest rate At
present, all the members of Employees’ Provident Fund Organization (EPFO) get 8.50% interest on their Employees’ Provident Fund (EPF) deposit.
GPF gives 7.1 percent interest in the current quarter.
PPF currently has a fixed interest rate of 7.1 percent.
Maturity period
EPF matures when the beneficiary reaches the age of 58 years. GPF matures at the time of retirement. At the same time, PPF matures in 15 years. Permanent closure of
Premature
Closure EPF can happen after two months of job loss. The closure of GPF takes place after the loss of a government job.
Permanent closure of PPF happens after five years with certain conditions, that too when there is a matter of medical or education of the child.
Tax exemptions
If a person withdraws the balance amount from his EPF account after five years of account creation, then he is exempted from tax.
GPF is a tax-free retirement cum savings scheme.
In case of PPF, the amount deposited for it every year is eligible for tax exemption up to Rs 1.5 lakh under section 80C of the Income Tax Act.
