Which retirement plan is finest for you? Know right here

Retirement plans backed by the federal government provide many choices to people to safe their future. There are three well-liked selections inside this amongst folks – Voluntary Provident Fund (VPF), Employee Provident Fund (EPF), and Public Provident Fund (PPF). Today, we are going to inform you all about these plans and their withdrawal guidelines, eligibility standards, and threat elements with the intention to take an knowledgeable resolution about your future. 

Employee Provident Fund (EPF)

Employee Provident Fund (EPF) is a compulsory retirement financial savings scheme. Under this, each the worker and the employer contribute a set quantity to the EPF as per the wage construction. Partial withdrawals are allowed, nevertheless, your complete corpus is launched when an individual reaches the age of retirement. EPF plan additionally supplies tax advantages and is appropriate for salaried workers and as a retirement-focused financial savings choice.

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Public Provident Fund (PPF)

Public Provident Fund (PPF) permits people to contribute to their retirement funds whereas decreasing taxation. PPF has a tenure of 15 years and partial withdrawals are additionally allowed after a sure time. This funding choice can be utilized by each salaried and non-salaried people. 

Voluntary Provident Fund (VPF)

Under the Voluntary Provident Fund (VPF), the month-to-month contribution is fastened, nevertheless, the worker can provide greater quantities to the fund on a voluntary foundation. If one will get a bonus or different revenue in extra, they’ll add that quantity to their retirement plan. If you withdraw the cash after 5 years, no tax shall be deducted.

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So, out of EPF, VPF, and PPF – which one is best for you?

In a method, each EPF and VPF are the identical except for the Voluntary Provident Fund permitting people so as to add more money. On the opposite hand, PPF has a lock-in interval however affords versatile withdrawals.

Under the Employee Provident Fund (EPF) and Voluntary Provident Fund (VPF), the curiosity earned is non-taxable if it stays under Rs 2.5 lakh in a monetary yr, whereas authorities workers have the next threshold of Rs 5 lakh. 

But, if the curiosity transcends these factors, will probably be topic to taxation below revenue from different sources. The curiosity earned on the Public Provident Fund (PPF) will not be taxable.

The important factor to notice right here is that every one of those choices are low-risk.