Difference between EPF and PPF ? Which is better and why ?

What is the Difference between EPF and PPF? Which one is better and why?

The EPF (Employee Provident Fund) or the PPF (Public Provident Fund) both will refer to the retirement benefit scheme that are available for the salaried employees. Difference between EPF and PPF – Eligibility, Maturity, Etc.. full information about epf & ppf given below.

Then what makes the difference between the EPF and PPF?

What are EPF and PPF?

• Step by Step Difference Between EPF and PPF

PPF (Public Provident Fund) it is a statutory scheme which was launched by the central government. The main objective of starting this scheme is that providing old age income security to the self employed persons and workers from unorganized sectors.

1. The opening of a PPF account is based upon the voluntary decision of the individual.
2. To open this account you need not be a salaried employee, you could be a consultant, freelancer or you could be a contract worker.
3. Any individual can open the PPF account in any national banks that which are handling the PPF accounts.
4. The account holders can deposit the money minimum Rs 500\- to maximum 70,000\- per year.

EPF (Employee Provident Fund) is the other statuary scheme which is maintained and regularized by the Ministry of Labor and Employment. In which retirement benefit applicable only for the salaried employees. In this scheme employer make a fraction of his salary contribute to this scheme monthly.

1. This scheme both employee and employer responsible to manage the account. For knowingly or unknowingly 24% of your basic salary is contributed to the EPF account.
2. The amount gather together in the account can be withdrawn by the employee at the time of retirement and resignation.
3. The amount in an EPF account can be transferred from one company to other in case of employee switches the job.

Eligibility for EPF and PPF

• The individual who belongs to India and employed are eligible to open the EPF account.
• But for the PPF account all the unemployed and employed individuals are eligible to open the account.
• Even the minors can also open the PPF account.

Return on investment for EPF and PPF accounts

The rate of interest or rate of return on EPF and PPF accounts is 8.5% annually and 8.7% per annum.

This is the rate of interest which is provided to the amount contributed to the EPF a d PPF accounts by the individual.

Investment Tenure for the EPF and PPF accounts

The below are the investment tenure for the EPF and PPF accounts.

• The amount can be withdrawn at the time of maturity that is which occurs after 15 years.
• But in case of EPF you can withdraw the money at any time by providing the particular documents.

Tax Implication for the EPF and PPF accounts

The below are the details of tax implication on EPF and PPF accounts.

1. For the PPF accounts there is no tax applicable for the maturity amount.
2. For an EPF accounts if you are withdrawing the amount within 5 years you have subjected with the tax.
3. Or if you are not working for more than 5 years and your EPF account is transferred to the other employee account then your amount is not subjected to tax.

However EPF and PPF both are useful as per their certain circumstances.

EPF is very much useful for the salaried employees. In which they can with draw the money at what time they want but they have to submit particular documents.

PPF is a good alternative for the individuals who are self employed are from unorganized sectors. But the issue in the PPF accounts is that they can withdraw the money at the full completion of the tenure of the account.

Our next article is about EPF vs PPF Vs VPF With Respect To CTC & Salary Slip. Stay tuned to our website https://epfouan.com/