EPF and PPF are one of the most popular choices among individuals when it comes to retirement planning. Investment in these particular schemes helps one to save a lump sum amount so that it can be used later on at the time of financial crunch.
1) Definition PPF is a statutory scheme launched by the central government with an objective of providing old age income security to individuals. On the other hand, EPF is a retirement benefit which is applicable only for salaried employees. It is basically a fund where both the employer and employee contribute 12% of employee’s salary.
2) Return on investment The rate of return in case of PPF accounts is 8.00% per annum while EPF accounts yield a return of 8.65% annually.
3) Lock-in period EPF has a lock-in period of 5 years. You can withdraw the maturity amount either on or after your retirement at the age of 55. In case of PPF, there is a lock-in period of 15 years.
4) Investment tenure In the case of EPF, the amount is paid at the time when you resign or retire, whichever occurs earlier which upon job change is transferred from the old company to a new one. In case of PPF, the amount can be withdrawn on maturity only, after 15 years.
5) Tax Benefit In case of PPF, the contribution is income tax slabs deductible under Sec 80C, the maturity amount is also tax-free.
In the case of EPF, the contribution is tax deductible. Maturity amount is tax-free only on completion of 5 years.
1) Definition PPF is a statutory scheme launched by the central government with an objective of providing old age income security to individuals. On the other hand, EPF is a retirement benefit which is applicable only for salaried employees. It is basically a fund where both the employer and employee contribute 12% of employee’s salary.
3) Lock-in period EPF has a lock-in period of 5 years. You can withdraw the maturity amount either on or after your retirement at the age of 55. In case of PPF, there is a lock-in period of 15 years.
4) Investment tenure In the case of EPF, the amount is paid at the time when you resign or retire, whichever occurs earlier which upon job change is transferred from the old company to a new one. In case of PPF, the amount can be withdrawn on maturity only, after 15 years.
5) Tax Benefit In case of PPF, the contribution is income tax slabs deductible under Sec 80C, the maturity amount is also tax-free.
In the case of EPF, the contribution is tax deductible. Maturity amount is tax-free only on completion of 5 years.
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