Investment Tips: Keep these things in mind before starting investment, there will be no money problem in future

Tax exemption is available on investment in EPF and PPF, opportunity to earn big profits in the long term, know full details

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new Delhi. Some part of the salary of the employed people is deposited in the Provident Fund every month. Along with this, the company also deposits money in that fund. Employees Provident Funds are a great medium of investment. EPF is a retirement benefit program.

Public Provident Funds have been created for those who do not work. There is no tax on investment in both and investment in both is beneficial for long term. So, should one invest in both EPF and PPF? Only employed people can invest in EPF. Currently, the interest rate on EPF is 8.5 percent, while the interest rate on PPF is 7.10 percent.

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no tax on investment

There is no tax on investment in both EPF and PPF. It comes under EEE (Exempt-Exempt-Exempt) category. You get the benefit of tax deduction by investing money in it. The interest income is also completely tax free, while there is no tax on maturity and withdrawal. In such a situation, both are great schemes for retirement and long term investment.

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Tax will have to be paid if investment exceeds 2.5 lakhs

In Budget 2021, the government had announced that the interest earned on investing up to 2.5 lakh in EPF would be completely tax free. If you invest more than that, you will have to pay tax on the interest earned. EPF, VPF and PPF are included in the limit of 2.5 lakhs. Investment in EPF or PPF gets the benefit of deduction under section 80C of Income Tax, which is limited to Rs 1.5 lakh.

Self employed then invest in PPF

If you are self employed then you can invest in PPF. Its maximum limit is only 1.5 lakh rupees. Deduction benefit under section 80C can be availed on the entire investment. At present, the return of 7.1 percent is being given on PPF, which is tax free. In this way the net return becomes higher.

Excellent scheme in terms of returns

Financial experts advise that investment in both should be limited. Both are very good schemes in terms of returns. However, it is a long term investment. This investment cannot be used in the short term. By investing a little in both in the long term, you can earn big profits.

Tags: epf, Investment, PPF, Saving

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