Interest rate: The interest rate for PPF is declared every quarter and is linked to yields from government securities of similar maturity, along with a mark-up of 0.25 percentage point.The interest rate for VPF/EPF is declared by EPFO at the end of the year.The study also reviewed a number of selected international case studies, focusing on the New Zealand experience.The case studies included information not only on the published results, but also detailed information on the methodologies employed and data collection methods.VPF offers a higher rate of interest (8.65 per cent) and the contributions are eligible for tax exemption up to Rs 1.5 lakh under Section 80C of the Income Tax Act. Members of the Employees' Provident Fund Organisation (EPFO) invest 12 per cent of their salary (basic plus dearness allowance) towards provident fund, with a matching contribution from the employer.One can contribute more through VPF by intimating the employer.
While the falling rates have created a dearth of tax-efficient saving instruments, the Voluntary Provident Fund (VPF) remains a good option for the salaried to build a retirement corpus.
If you are a salaried employee and looking for a safe and secure investment with assured returns, then you do not even have to step out of your office.
You can invest in Voluntary Provident Fund (VPF), which gives the same returns as your Employee Provident Fund (EPF) and a tax-free income to boot.
VPFs also enjoy Section 80C tax benefits and the interest earned is tax-free.
But bear in mind that VPFs are long-term investments and governed by the same set of rules that are applicable to provident funds.