PUBLIC PROVIDENT FUND
The public provident fund scheme is a kind of long-term investment option that mainly offers an attractive rate of interest and returns on the amount invested. the interest earned and the returns are not taxable under income tax. PPF is eligible for any Indian citizens. PPF is the safest in the view of risk point. It targets caters to everyone. its tenure continues for 15years. It is the most popular fixed-income product.
There is no age requirement for opening a PPF account.PPF account can be opened in the name of self, spouse, children. PPF account can be opened at any post office. Its rate of interest is set at 7.80%.it saves taxes.in a PPF account, the minimum number of deposits is rupees 500 and the maximum investment is a year 1.5lakhs. it provides a better interest rate than bank FD. PPF helps in saving taxes. But any NRI cant open account in it. It provides a better interest rate and contains low risk. Its returns are fixed by the government every quarter.PPF has low liquidity partial withdrawals from the 6th year.
Tax implications on maturity amount are tax-free. It always provides a better interest rate and tax benefit. It provides a sovereign guarantee. The documents which are required in opening a PPF account are identity proof such as a pan card, driving license, voter id, passport. Two passport-size photographs, birth certificate.
EMPLOYEE PROVIDENT FUND
The employee provident fund organization is a kind of social security body under the jurisdiction of the ministry of labor and employment. It is only open to salaried individuals. the interest rate offered on EPF is 8.50% for FY 2019-20. In EPF there is no tax deduced if the withdrawal is made after 5 years of services. The EPF account becomes inoperative after 36 months of unemployment .no interest is offered on the accumulated fund. The employee’s contribution is 12% of basic + dearness allowance and the employer’s contribution is 8% towards EPS and 3.67% towards EPF.
The EPF scheme is a long-term scheme that continues longer on period. It is a tax saving and Secure scheme. EPF provides pension benefits also. In this scheme the contribution of employee and employer is equal. The interest is offered on the accumulated fund, the benefit of the employee’s provident fund is that amount can be withdrawn under unemployment and there is no tax deduction.
This scheme provides tax-free savings benefits. The minimum service period for availing benefits of EPS is 10 years. In case of death of the members, the widow and children get a monthly pension. The Employee provident fund act aims to provide a better future for industrial workers on his retirement and the dependent in case of his death or any other circumstances. In the order to provide the benefit of the provident funds to more workers the provision of the act has been amended from time to time. this act was amended in 1971 basically to provide for family pension and life insurance benefits for the subscriber. It was again amended in 1976 for introducing a deposit-linked insurance scheme.
The main reason for establishing this act is to provide provident funds, family pension funds, and many more other insurance schemes for employees’ benefit. In EPF scheme an inspector has given a certain area of inspection with the team, the appropriate government may by notification in the official gazette appoint such persons as it thinks fit to be. In EPF the contributions are to be made every month.
The main 6 reasons for which you can withdraw from your EPF account while you are in the job are for marriage expenses, for education fees, for purchase of house or plot, repayment of existing home loan, repairs alteration of the existing house, and for medical treatment also.
General PROVIDENT FUND
The general provident fund is a kind of savings scheme available to serve government employees, this is a kind of fund in which allows the individuals to deposit a sum of money periodically in their accounts until their retirement. this fund is mainly managed by the department of pension and pensioner’s welfare under the ministry of personnel, public grievances, and pensions. General provident fund interest at the rate of 7.9% (Seven points nine percent) w.e.f. 1st October 2019 to 31st December.
The eligibility for GPF is only government employees, the maturity period of this scheme is at the age of retirement and its premature closure is on leaving government service.
At the time of the subscription of the general provident fund, the GPF holder will nominate one or more than one person for having the right to claim for the fund and this is the best rule in this scheme so that the fund will be utilized by the needy one and whenever an employee quits the job at any time or stage, he becomes eligible to withdraw his general provident fund.
The contribution of tax is exempt from tax and the interest rate on GPF is also exempt from tax. the GPF funds are all-time revised by the government from time to time depending on the prevailing market interest rate and as per new and latest notification, the government of India has decreased the rate of interest on GPF or general provident fund by 0.8%. GPF has a kind of provision for refundable advances from the funds on various but pre-defined grounds having education, medical, etc.
In the above highlighted important topic of what is PPF, EPF, GPF, provident funds types, In the conclusion I came to know this, all these schemes are established for human welfare and divided into groups like PPF for all the residents of India whether employed, non-employed or self-employed,
EPF is a saving scheme for an organized sector like companies employers for the welfare and goodness for their future. GPF for only government employees is a type of saving scheme. all these funds are helpful and beneficial for all citizens.
You may refer to this video if you want the explanation in Hindi