Best 80C Investment for Salaried People #finance #tax
The underdog 80C investment option: VPF!!!
VPF is Voluntary Provident Fund, an extension of the EPF!!!
All the rules applied to EPF are applicable to VPF.
That’s why it earns 8.1% p.a. & comes under the Exempt-Exempt-Exempt (EEE) category.
However, the benefits come with the following conditions:
1. The scheme has a lock-in period of 5 years.
2. The rate of interest of VPF is decided by the Government of India on a yearly basis.
3. Only individuals who work for companies that come under the Employees’ Provident Fund Organisation (EPFO) and have an EPF account are eligible to open a VPF account. Individuals who work for unorganized sectors are not allowed to open a VPF account.
4. If the VPF money is withdrawn within five years, you will have to pay tax on the interest amount earned from your contribution towards the VPF.
5. This contribution must be more than 12%. Now, it can even be 100% of the basic salary and dearness allowance.
But how to actually take advantage of this?
All you need is to inform your employer that you are willing to increase your EPF contribution through a registration form.
However, if your contribution to EPF and Voluntary Provident Fund (VPF) exceeds Rs 2.5 lakhs, then the interest earned on the excess contribution will be taxed as per your income tax slab.
So, while building a retirement fund, leverage VPF to get good returns & tax deductions!!
#anushkarathod #finance #80C #investments #VPF