In this article we will elucidate on the difference between the three relatively similar schemes of GPF, EPF and PPF.
Difference Between EPF, PPF And GPF
There are several savings schemes offered by the government which include GPF, EPF, and PPF. Knowing about the interest rates and the benefits of saving schemes would be of great help to employees and common people. You must know about the employer and employee contribution to the above saving scheme. We’ll learn about the difference between EPF, PPF, And GPF in this blog.
Full Forms
- GPF full form is General Provident Fund
- EPF full form is the Employees Provident Fund
- PPF full form is Public Provident Fund
GPF is a savings scheme that is available to government employees. EPF is a savings scheme that is available to employees in companies with more than twenty workers. PPF is available to everyone regardless of being employed, self-employed, or unemployed.
The government of India offers numerous saving schemes including PPF, EPF, and GPF. Each of these schemes have varying interest rates and advantages and are helpful for employees and individuals. Also, there will be different contributions from both employers and employees. Understand more about these different saving schemes from below.
A Provident Fund Registration is mainly a savings scheme aimed at building a reliable retirement corpus in the form of a lump sum amount during the time of retirement. Provident fund principally provides financial security to the old people. EPF is generally available to salaried people in the organized sector and contributions to the fund are made by both the employees and the employers. In some situations, even the state makes some contribution to the fund. However, there are also some kinds of provident funds in which individuals having business income can invest such as PPF. GPF, on the other side, is only available to government servants.
General Provident Fund (GPF)
GPF is wholly available for government employees. People employed with the Indian Government contribute a minimum of 6% of their salary and are eligible for the accumulated funds at the time of retirement or superannuation.
All the temporary government employees after the continuous service of one year, all the permanent government employees, and all the re-employed pensioners (other than those qualified for Contributory Provident Fund) are required to subscribe to the GPF mandatorily. GPF is taken care of by the Department of Pension and Pensioner’s Welfare governed by the Ministry of Personnel, Public Grievances and Pensions. The subscriber online login is available for GPF where you will have to provide your GPF no. and DOB to process further.
Employee Provident Fund (EPF)
EPF is a government-backed savings scheme that offers a social security net to the employees working in the structured sector. Any organization consisting of twenty or more employees is authorized to be registered under the EPF scheme and offer its benefits to its employees. The Employees Provident Fund Organization (EPFO) takes care of EPF under the Employees Provident Fund and Miscellaneous Provisions Act, 1952.
Apart from the long term retirement corpus, an EPF adherent is also eligible for a pension under the Employees Pension Scheme (EPS). If the adherent has completed 10 years of cumulative service under the EPF registered organizations, he/she will be eligible for EPS.
Public Provident Fund (PPF)
PPF is again a government-guaranteed long term savings cum tax saving provident fund which was launched in 1968 under the Public Provident Fund Act, 1968. However, contrasting the GPF and EPF, both salaried, as well as self-employed people having business income, can subscribe for PPF. Also, it should be kept in mind that enrolling under PPF is completely a deliberate decision of the subscriber. While the subscription under GPF and EPF is compulsory for the eligible employee. The Department of Economic Affairs takes care of PPF under the Ministry of Finance.
Only the investor makes contributions towards PPF. One can start with the minimum investment of Rs.500 and go up to Rs.1.5 lakh annually. This can be in order to avail tax benefits under Section 80C of the Income Tax Act, 1961. One can also make contributions to PPF as in lump sum or in a maximum of 12 installments per year. A clear understanding of EPF, GPF, PPF saving schemes would be of great help for employees. The above article gives a clear idea of the taxation and interest rates of the above saving schemes. Invest in the above saving schemes based on your needs.
Conclusion
Unlike western countries where such savings schemes and retirement welfare schemes are mandatory, in India they are purely voluntary. A person can choose to invest in a provident fund scheme or choose to invest elsewhere if they feel so. However, there are several tax exemptions and deductions available for those who invest in the provident fund schemes. Besides, being a government scheme has the extra measure of security and is considered almost risk free. If you have any other queries with regards to any other legal or regulatory matter, get in touch with us and we will ensure that your concerns are addressed by a our team of legal experts.
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