There is a continuous reduction in the interest rates of fixed deposits. In such a situation, if you want to invest somewhere in your retirement fund where you can get better returns, then you can invest in Voluntary Provident Fund (VPF), ELSS or Public Provident Fund (PPF). Today we are telling you about these three schemes so that you can invest in the right place according to your own.
Special features related to Voluntary Provident Fund (VPF)
In EPF, only 12% of basic salary can be contributed but there is no limit to investing in VPF. That is, if the employee increases his contribution to the provident fund by reducing his in-hand salary, then this option is called VPF. 8.5% interest is being given in VPF. This is an extension of EPF only.
For this reason, only jobbers can open it. In this, 100% of the basic salary and DA can be invested. The government decides the interest rate of VPF every financial year. You have to contact your company’s HR or finance team and request the contribution to VPF. VPF will be added to your EPF account as soon as it is processed. No separate account of VPF is opened.
The contribution of VPF can be revised every year. However, under VPF, there is no restriction on the employer to make a higher contribution to the EPF at the same rate as the employee. If you change jobs, you can easily transfer this account. A loan can also be taken on this. This loan can also be taken for children’s education, home loan, children’s marriage etc. For partial withdrawal of funds from VPF account, it is necessary for the account holder to work for 5 years, otherwise, tax is deducted.
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The entire amount of VPF can be withdrawn only on retirement. VPF has the benefit of tax deduction under Section 80C of the Income Tax Act. Investment in it, interest on it and money received on completion of maturity period is completely tax-free.
How much money you will get by investing in it
If you invest 2 thousand rupees every month for 15 years in VPF, then you will get around 7.2 lakh rupees. Your contribution in this will be 3.6 lakh rupees.
Special things related to PPF
This scheme can be opened anywhere in the bank or post office. Apart from this, it can also be transferred to any bank or any post office. It can be opened with only Rs 100, but then it is necessary to deposit Rs 500 once a year. Maximum 1.5 lakh rupees can be deposited in this account every year. This scheme is for 15 years, from which it cannot be withdrawn. But it can be extended for 5–5 years after 15 years. It cannot be closed before 15 years, but after 3 years, a loan can be taken against this account.
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If anyone wants, they can withdraw money from this account under the rules from 7th year. The government reviews the interest rates every three months. These interest rates can be more or less. Currently, this account is getting 7.1% interest. Through this investment, you can avail tax exemption up to Rs 1.5 lakh under 80C. Any person can invest in them.
How much money you will get by investing in it
If you invest 2 thousand rupees every month for 15 years in PPF, then you will get about 6.4 lakh rupees. Your contribution in this will be 3.6 lakh rupees.
Highlights of ELSS
There are 42 mutual fund companies in the country that run tax saving schemes. Every company has ELSS to save income tax. It can be bought online at home or sitting through an agent. If you have to invest in one go to save income tax, then usually minimum Rs 5000 and if you want to invest every month then usually minimum 500 An investment of Rs month can be started.
PPF Calculator: how much investment will have to be made to raise 1 crore,
Though there is a maximum tax exemption of Rs 1.5 lakh, there is no limit on the maximum investment. Investment in this income tax saving scheme is locked-in for 3 years. After this, the investor can withdraw this money if he wants. After three years, withdraw all the money you want or withdraw as much money as you need and leave the remaining money in this ELSS for as long as you want.
ELSS is only locked-in for 3 years, ie the money invested in it Will not be able to withdraw for 3 years. In this, the market link returns instead of the interest rate on the investment. In the last 10 years, the ELSS mutual fund category has given a return of around 8.5%.
How much money you will get by investing in it
If you invest 2 thousand rupees every month for 15 years in VPF, then you will get around 7.2 lakh rupees. Your contribution in this will be 3.6 lakh rupees.
Where to invest?
Income tax can be saved by investing in all three places. Apart from this, all three schemes have their own specialities and drawbacks. If you are employed, then it would be right to invest in VPF because from here you will get more interest than PPF and ELSS. On the other hand, if you can take a little risk, then ELSS is a better option for them. Money should be invested through SIP, which is invested every month. This reduces the risk of investment and also increases the chances of getting good returns. On the other hand, if you want to stay away from the risk of the market, then investing in PPF would be right.