Table of Contents
What is difference between EPF PPF and VPF?
Interest offered on a VPF account is same with an EPF account which is 8.5\%….Difference between PPF & VPF.
| Features | PPF | VPF |
|---|---|---|
| Employee Contribution on Basic + DA | N.A | Voluntary (Upto 100\%) |
| Employer Contribution | N.A | N.A |
| Taxation on Maturity Returns | None | Tax Free |
| Tax Deduction | As per section 80 C | As per section 80 C |
Is it safe to invest in VPF?
VPF also gives the same tax benefits as EPF. It falls under the exempt-exempt-exempt (EEE) tax structure—you get tax deduction benefit at the time of investment, and there’s no tax payable on accrual or withdrawal. When you change jobs, you can also move your VPF funds just like you move EPF.
Is VPF better or PPF?
Having said that, it is important to note that the rate of return for VPF is 8.5\% and PPF is 7.1\% but the tax treatment of returns for both are different. Higher contribution to VPF along with a higher interest rate can provide a faster way to build a sizeable retirement fund.
Is VPF taxable?
Taxation of VPF proceeds The interest earned on VPF is tax-free and withdrawals made after a period of five years are also made tax-exempt. Partial or full withdrawals made within five years are taxable.
Can we withdraw VPF amount?
You cannot discontinue or withdraw out of a VPF scheme in the middle of the year. VPF scheme can be availed only by salaried professionals enrolled with the EPF. If the direct tax code comes into effect, the entire maturity amount becomes taxable.
How much VPF is deductible?
Taxation of VPF proceeds The taxpayers can deduct up to Rs 1,50,000 a year by investing in VPF. The interest earned on VPF is tax-free and withdrawals made after a period of five years are also made tax-exempt.
How many times VPF can be withdrawn?
Lock-in period As per Voluntary Provident Fund withdrawal rules, contribution to a VPF account is subject to a maturity period of 5 years. Therefore, an individual cannot withdraw any sum from their Voluntary Provident Fund before the completion of 5 years sans repercussions.
What is the difference between VPF and PPF and EPF?
While VPF and EPF scheme can only be availed by salaried individuals. VPF subscribers can contribute any amount over the necessary 12\% which will be contributed in EPF account. Besides EPF, both in VPF and PPF the contribution is voluntary. Only salaried individuals can sign up for VPF whereas PPF is for both salaried and non salaried individuals.
What is a voluntary provident fund (VPF)?
Going by the name, a Voluntary Provident Fund (VPF) is a regular provident fund scheme wherein a depositor can electively decide the amount that he wishes to contribute towards the scheme on a regular basis. Under this scheme, the contribution should mandatorily be over and above 12\% made by the employer on the employee’s behalf
What is the percentage of VPF in the US?
The interest rate applicable to the EPF contributions is 8.5\% for FY 2020-21. What is Voluntary Provident Fund? Voluntary Provident Fund (VPF) aka Voluntary Retirement Fund is the voluntary fund contribution from the employee towards his provident fund account. This contribution is beyond the 12\% of contribution by an employee towards his EPF.
What is a VPF account?
A VPF is an extension of the EPF. The VPF option is available only to salaried individuals who receive their monthly payments through a specific salary account. Benefits of Voluntary Provident Fund