Provident Fund (PF) will attract tax on interest received on a contract of more than 2.5 lakh rupees per annum. This has reduced the brightness of this tax-free option to some extent. However, in all fixed income options, the Voluntary Provident Fund (VPF) is still the best option. Come, here we know how…
If you want to invest more in your provident fund then you can do it through the VPF (Voluntary Provident Fund). On this too, like PF, there is an interest of 8.5 per cent. Now understand how your PF is deducted, it is 12 percent of the basic salary. This same share also belongs to your company ie the employer. However, you can increase your contribution through VPF (Voluntary Provident Fund). And you will not agree but this can be increased to 100 percent of basic salary. Meaning if you want to increase your savings then do VPF. Now understand how to invest in it.
How is investment?
Employees will have to contact their company HR to take advantage of the Voluntary Provident Fund. In this, he has to tell that he wants to increase his contribution to PF. If the company offers VPF service, HR will complete the further process according to the company’s policy. The VPF is usually attached to the employee’s existing EPF account. It can be selected at the beginning of the financial year. The contribution of VPF can be revised every year.
Tax rebate is also available
1.VPF account also gets the same amount of interest as EPF.
2.VPF gets tax exemption under section 80C of income tax.
3.Investment made in VPF account also comes in EEE category. In this, the money received on completion of investment, interest and maturity period is completely tax free.
4.VPF passbook can be viewed online. Also a claim can be made online for withdrawal.
5.VPF account also has a lock-in period, which is till the retirement or resignation of the employee.
6.For the partial withdrawal of the amount from the VPF account, it is necessary for the account holder to work for 5 years, otherwise the tax will be deducted.
7.The entire amount of VPF can be withdrawn only on retirement.
8.VPF funds can also be transferred like EPF if you change jobs.
