Maximizing Returns: Exploring VPF and PPF for Salaried Employees
Investors seek ways to earn more on their investments, especially risk-averse salaried employees who prefer government-sponsored schemes
Investing for Better Returns
Salaried employees often choose schemes like EPF and PPF for growing their money, with PPF offering EEE benefits
Exploring EPF and PPF
Employees can contribute more than 12% of their Basic Pay + DA to their EPF accounts via VPF, earning a higher interest rate
Voluntary Provident Fund (VPF) for Added Benefits
Employees debate whether to increase VPF contributions or invest in PPF for tax savings and retirement planning
Choosing Between VPF and PPF
The decision between VPF and PPF should be based on financial goals and existing financial conditions
Consider Financial Goals and Conditions
Investors evaluate tax liabilities and may benefit more from increasing EPF contributions through VPF if their EPF contribution is below ₹1.5 lakhs per year
Assessing Tax Liability
VPF investments have a limit of ₹2.5 lakhs per year, with a deduction of ₹1.5 lakhs under Section 80C
Limitations of VPF Investment
Before increasing VPF contribution, review EPF and VPF contributions to ensure they don't exceed the statutory limit
Review Current Contributions
There is no compulsion to invest in VPF, and the decision depends on individual preferences and financial independence
No Compulsion for VPF
Decide how much money to allocate to VPF, PPF, or both based on long-term financial goals and independence