Can I invest more than 1.5 lakhs in VPF?
VPF also promises deductions under section 80C of the Income-tax Act, 1961 up to Rs 1.5 lakh in a particular fiscal year when it comes to tax-free benefit on the investment number, much like EPF. For PPF, the overall return received is exempted from taxation, but not more than Rs 1.5 lakh can be invested per year.
Is VPF better than 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.
Will VPF be taxed?
It was announced in Budget 2021 that interest on Employees’ Provident Fund (EPF) and Voluntary Provident Fund (VPF) contributions above Rs 2.5 lakh in a financial year will be taxable.
Is provident fund part of 80C?
An employee’s contribution to the Employee Provident Fund (EPF) account also earns a tax break under Section 80C of up to Rs 1.5 lakh. This amounts to 12\% of salary that is deducted by an employer and deposited in the EPF or other recognised provident funds.
Can VPF be withdrawn?
Employers are under no obligation to contribute to their employees’ VPF portfolio. Likewise, an employee is also under no obligation to contribute to the Plan. Once the contribution is chosen in VPF, the same cannot be terminated or discontinued before the base tenure of 5 years completed.
Which investment is not eligible for deduction under section 80C?
Section 80C is applicable only for individual taxpayers and Hindu Undivided Families. Corporate bodies, partnership firms, and other businesses are not qualified to avail tax exemptions under Section 80C.
How much can I deduct under 80C?
Section 80C provides deductions on various investments up to ₹ 1.5 lakh per year from your taxable income. Whereas Section 80CCC provides a deduction of up to ₹ 1.5 lakh per annum for the contribution made by an individual towards specified pension funds.
Can I withdraw VPF after resignation?
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.