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“EPF, VPF, and PPF: Demystifying Taxation and Withdrawal Rules”

EPF vs VPF vs PPF: Understanding Taxation and Withdrawal Rules

Are you confused about the difference between EPF, VPF, and PPF? Don’t worry, you’re not alone. These investment plans are often confused with each other due to their similarities. Here’s a breakdown of each and their unique taxation and withdrawal rules.


EPF stands for Employee Provident Fund, and it’s a form of savings plan designed for employees. Employers are required to contribute 12% of an employee’s basic salary to their EPF account. Employees can also contribute an additional 12% of their basic salary as a voluntary contribution.


Both employer and employee contributions are tax-deductible under Section 80C of the Income Tax Act. Additionally, interest earned on the EPF balance is tax-free. However, withdrawals made before five years of continuous service are taxable under the 10% TDS (tax deducted at source) rule.

Withdrawal Rules:

EPF accounts can be withdrawn fully or in part after five years of continuous service with one employer. Partial withdrawals can be made for specific purposes like medical expenses, education, marriage, or home purchase. Lump sum withdrawals can be made after retirement, or in the case of severe illnesses. However, loan repayment and housing purchases are also allowed for withdrawals. Individuals can withdraw a maximum amount of 50% of their balance for the former, and 90% for the latter.


VPF means Voluntary Provident Fund. It’s similar to EPF in terms of features and benefits, but it’s not mandatory for employers. Instead, employees can contribute up to 100% of their basic salary to their VPF account.


Tax benefits for VPF contributions and interest earned are the same as EPF.

Withdrawal Rules:

Withdrawal rules for VPF are identical to those for EPF.


PPF stands for Public Provident Fund, and it’s a long-term investment scheme offered by the government. The minimum investment per year for PPF is Rs. 500, while the maximum investment is Rs. 1.5 lakhs.


Contributions to a PPF account are tax-deductible under Section 80C of the Income Tax Act. Interest earned on PPF deposits is also tax-free.

Withdrawal Rules:

PPF accounts mature after 15 years, after which the account holder can make lump-sum withdrawals. Partial withdrawals can be made after the account has been active for six years or more, but the maximum withdrawal amount is capped at 50% of the balance. Loan repayment is also allowed after three years of continuous investment.

In conclusion, EPF, VPF, and PPF have their unique features and benefits. EPF and VPF are more commonly used by salaried employees to save for retirement. PPF is ideal for those who are looking for a safe long-term investment option. Knowing the differences between these savings plans will make it easier for you to choose the one that suits your needs best.

Sara Marcus
Sara Marcushttps://unlistednews.com
Meet Sara Marcus, our newest addition to the Unlisted News team! Sara is a talented author and cultural critic, whose work has appeared in a variety of publications. Sara's writing style is characterized by its incisiveness and thought-provoking nature, and her insightful commentary on music, politics, and social justice is sure to captivate our readers. We are thrilled to have her join our team and look forward to sharing her work with our readers.


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