In this article I will be writing about the Provident Fund(PF) or Employee Provident Fund(EPF). It is one of the important component under section 80c. This deduction is done by your employer, so it becomes the compulsory savings for every salaried person. There is few important facts which needs to get the focus. I will write it in this article. If you have any doubts, please post it in the comments section. Subscribe to free email updates.
Employee Provident Fund(EPF)
- Saving on Provident Fund(PF) earns 8.5% interest rates on monthly cumulative basis.
- It is compulsory that 12% of basic salary will be deducted as the PF.
- With your interest, you can increase the PF contribution up to 25% of basic salary.
- Interest income on Provident Fund(PF) is not taxable.
- If you are with drawing the money before five years, the amount is taxable.
- You can close the PF account only when you retire or leaving the company.
- The main advantage of PF is it adds lump sum amount for your retirement apart from any other savings.
- Up to Rs.100000 can be shown as the tax exemption.
I hope this article would have been very useful for you to know about the Provident Fund(PF). If you have any doubts, please post it in the comments section.
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