Question 1

What is the difference between EPF, PPF, and VPF?

Accepted Answer

EPF is mandatory for salaried employees with matching employer contribution. VPF is a voluntary additional contribution to EPF by the employee at the same 8.25% interest rate. PPF is an open-ended government scheme for all Indian residents offering 7.10% tax-free returns.

Question 2

What is the current EPF interest rate for FY 2024-25 / 2025-26?

Accepted Answer

The EPFO has notified an interest rate of 8.25% per annum for EPF and VPF accounts, compounded annually.

Question 3

Is PPF interest completely tax-free?

Accepted Answer

Yes, PPF enjoys exempt-exempt-exempt (EEE) tax status. The annual investment up to ₹1.5 Lakh qualifies for Section 80C deduction, and all interest earned and the final maturity amount are completely exempt from income tax.

Question 4

What is the tax rule on EPF and VPF employee contributions above ₹2.5 Lakh?

Accepted Answer

If an employee's annual contribution (EPF + VPF combined) exceeds ₹2,50,000 in a financial year, the interest earned on the excess contribution is taxable as per the individual's income tax slab.

Provident Fund Hub (EPF, PPF, VPF)