Employees Provident Fund Vs Public Provident Fund

When it comes to saving to build a handsome retirement corpus, in order to lead the same life as today, after we are relieved from all our duties, EPF and PPF are the best among all the alternatives. They are considered the best because they generate guaranteed returns that are tax free too and its long term investment with lock-in-period does not let you discontinue or withdraw the amount before the maturity.

The restriction with EPF is that it is available to only salaried persons and the non employees, business men, professional or any other person does not get this facility. EPF is a fixed contribution in which a certain percentage of the employee's salary is deducted and credited to the employee's provident fund account and employer also contributes some amount. It is deducted till the employee retires.

PPF account can be opened by anyone among salaried employee, self-employed, businessman, professional or any other person. It is backed by Central Government. It also offers to make a lump sum investment in addition to invest in instalments maximum upto Rs 1.5 lakh per annum.

The main difference between PPF and EPF that you need to look at which might help solve the confusion are given in below comparison table:

Difference Between EPF and PPF

Basis of DifferenceEmployees Provident Fund (EPF) Public Provident Fund (PPF)
ObjectiveTo provide financial security to an
employee after his service in the
organisation and it is also considered
most reliable retirement corpus
To avail tax rebate under sec 80C of
Income Tax on deposits with guaranteed
returns on investment
MeaningA fixed contribution which is a certain
percentage of the employee's basic
salary plus D.A. is credited to the
employee's provident fund account by the
employee alongwith some contribution
that is made by the employer to the
employee's EPF account.
A long-term saving instrument
established by the central government
which generates tax-free maturity to
provide the old-age income security
EligibilityOnly salaried individuals
Salaried employee, self-employed,
businessman, professional or any other
person can open it
Investible amount12% of the employee's basic salary plus
D.A. and contribution of 3.67% of the
employee's basic salary plus D.A. is
also made by the employer
Investments in smaller and unequal units
or in lump sum can be deposited to PPF
Maximum Investment Amount
Fixed which is 12% of the employee's
basic salary plus D.A. and an equal
contribution is also made by the
Rs 150,000 per year
Interest RatesFixed- presently 8.8% p.a.
Fixed- presently 8.1% p.a.
Interest Rates
Interest earned is
TenureTill retirement age of the employee
15 Years, can further be extended in
multiples of 5 years
Income Tax Rebate u/s 80CYes, upto Rs 1,50,000/- p.a.
Yes, upto Rs 1,50,000/- p.a.
MaturityTax Free, but in case the PF amount is
withdrawn before 5 years of serviceby
employee on resigning from the job then
the amount will be taxable
Tax Free
Premature WithdrawalsFull EPF amount can be withdrawn on
resigning from the job
Can be withdrawn from 7th financial year
onwards from the opening of the account
and only one partial withdrawal is
allowed every financial year
Tax Deduction at SourceNo
Safest Investment

Upcoming Bank Holidays

2017 February 24 is a bank holiday in Chandigarh due to Mahashivratri.
2017 February 27 is a bank holiday in Sikkim due to Losar.
2017 March 03 is a bank holiday in Mizoram due to Chapchar Kut.
2017 March 12 is a bank holiday in Jammu And Kashmir due to Holi (Jammu Province Only).

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