Best 80C Investment. Anushka Rathod
Voluntary Provident Fund (VPF) aka Voluntary Retirement Fund is the voluntary fund contribution from the employee towards his provident fund account. A VPF is an extension of the EPF. The VPF option is available only to salaried individuals who receive their monthly payments through a specific salary account.
Under the VPF scheme, the contributor decides on the amount of fixed contribution that is made towards the scheme on a monthly basis. In a VPF, it is a voluntary contribution with a maximum limit of 100%.
The VPF account comes under the Exempt-Exempt-Exempt (EEE) category. Therefore, all three i.e., the investment amount, interest, and maturity sum are tax exempted. 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 If the VPF money is withdrawn within five years, you will have to pay tax on the interest amount earned from your contribution towards the VPF.
But you should know other 80C investments are useful in one or the other way. PPF comes under Exempt-Exempt-Exempt (EEE) category too. And Tax Saving FD and NSC come under the Exempt Taxable Exempt (ETE) category i.e., the Interest accrued or paid out is fully taxable.
"This video is for educational purpose only, I am not a registered financial advisor Kindly do your own research before investing"
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