What is PPF, GPF and EPF? And Information on GPF Vs EPF Vs PPF

Introduction

The GPF full form is General Provident Fund, EPF stands for Employee Provident Fund, and PPF full form is Public Provident Fund.  All of these provident funds are systematically classified into saving schemes based on their names. The GPF is only available to government employees, whereas the EPF is only available to employees who work for private enterprises. PPF, on the other hand, is open to everyone, whether they are self-employed, employed or unemployed. This article will include information on “What is PPF, GPF and EPF?” And the difference between PPF, GPF, and EPF. Before going through GPF Vs EPF Vs PPF, let’s have a quick look at the meaning of all these terms and their benefits.

What is PPF (Public Provident Fund)?

The Public Provident Fund (PPF) of the Government of India is a retirement savings plan that strives to provide everyone with a secure post-retirement existence. The account requires a minimum deposit of INR 500 every financial year, with a maximum deposit of INR 1.5 lakh. In addition to providing retirement savings, you can claim income tax benefits on the amount you invest in the account.

PPF Benefits

• It is a Risk-Free scheme to Invest and earn interest from the investment.
• The Interest Rate on the investment done by an individual is compounded.
• A tax deduction is available under Section 80C of the Income Tax Act of 1961.
• For a period of 15 years, this is a long-term investment.
• Advances and loans against your PPF balance.
• The minimum investment is INR 500.
• From the sixth financial year onwards, a partial withdrawal facility is available.

What is GPF (General Provident Fund)?

For government employees, the General Provident Fund (GPF) is a smart way to save money. Until the employee retired from the government organization, he or she can contribute a portion of his or her pay on a regular basis. The employer transfers the total accumulated money in the GPF account to the employee upon retirement.

GPF Benefits

• Under Section 80C of the Income Tax Act of 1961, GPF investors are eligible for tax benefits on interest earned, gifts, and refunds.
• In the case that the corresponding individual dies, the nominee is entitled to additional payment under GPF criteria. This benefit is only available if an employee has worked for at least 5 years at the time of his or her death.
• When receiving final payment from a GPF account, an individual does not need to go through any further procedures.

What is EPF (Employee Provident Fund)?

The EPF Scheme is governed by the EPFO (Employee Provident Fund Organization).  Both the employee and the employer contribute 12% of the employee’s base salary and dearness allowance to the EPF. The current interest rate on EPF deposits is 8.10 percent per annum.

EPF Benefits

• It aids in long-term financial planning.
• Employees’ salaries are deducted on a regular basis, which allows them to save a significant amount of money over time.
• It may be able to assist an employee financially in the event of an emergency.
• It aids in the saving of money for retirement and the maintenance of a healthy lifestyle.

Difference between PPF, GPF, and EPF

PPF Vs GPF Vs EPF

• Loan Eligibility Criteria

• • Loans against the PPF fund are available in the third and sixth financial years after the account is opened. A loan of up to 25% of the amount deposited in the PPF account can be issued.

  • After seven years of service, an employee can borrow up to 50% of the amount placed in his EPF account for marriage and education, and after 10 years of service, he can borrow up to 90% of the amount put in his EPF account for a home loan.

  • A government employee can take out a loan against his GPF fund at any point throughout his employment.

• Tax Exemption Rule

• • If a person withdraws the remaining balance from his or her EPF account after five years, the amount is tax-free.

  • GPF, on the other hand, is a tax-free retirement-cumulative savings plan.

  • Deposits made to a PPF account each year are eligible for a tax exemption of up to INR 1.5 lakh under Section 80C of the Income Tax Act.

Conclusion

The primary distinction between these three is that GPF is a provident fund account for government employees, and employees contribute a portion of their salaries to the account. The PPF, on the other hand, is a provident fund that is a long-term investment that pays tax-free returns and interest. It is backed by the government, and it is quite easy to obtain a loan against it. Last but not least, the EPF is a provident fund in which the employee contributes a portion of their salary to the account, which can be up to 12% of the monthly basic pay.