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Frequently Asked Questions
What is the difference between EPF and PPF?
EPF is employer-employee contribution scheme for salaried workers with fixed returns around 8.15% annually. PPF is individual voluntary scheme offering higher returns (7-7.5%) with lock-in period of 15 years, suitable for self-employed persons.
Which retirement plan gives maximum tax benefit in India?
All three plans offer Section 80C tax deduction up to Rs 1.5 lakh. PPF provides tax-free interest and maturity amount. NPS offers additional Section 80CCD deduction and Rajiv Gandhi Equity Saving Scheme benefits for eligible investors.
Can I withdraw money from EPF, PPF, and NPS before retirement?
EPF allows partial withdrawal after 7 years of service. PPF permits withdrawal after 7 years. NPS has partial withdrawal at 50% after 10 years. Full withdrawal varies by scheme and age, with specific conditions and penalties applicable.
Which retirement plan is best for salaried employees?
EPF is mandatory for salaried workers earning above Rs 15,000 monthly, offering guaranteed returns and employer contribution. Combine with NPS for higher returns through voluntary contributions under Section 80CCD for better retirement corpus.
What are NPS tier 1 and tier 2 accounts?
NPS Tier 1 is locked-in account until 60 years, offering tax benefits under Section 80C and 80CCD. Tier 2 is voluntary, flexible account without tax benefits or withdrawal restrictions, suitable for short-term investments and liquidity needs.
