Tax & Savings
Contents
EPF vs PPF
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Employer-matched EPF vs voluntary PPF — both are tax-free, both are essential. Know the difference.
Visual Comparison
Key Differences
| Feature | EPF | PPF |
|---|---|---|
| Mandatory? | Yes — for employees ≥ 20 employees | Voluntary |
| Employer contribution | 12% of Basic+DA | None |
| Interest rate | 8.25% (FY 2024–25) | 7.1% p.a. |
| Withdrawal | At retirement/resignation (5yr for tax-free) | At 15 years maturity |
| Tax status | EEE (within limits) | Fully EEE |
When to Choose Which
Choose EPF
- You are salaried — this is automatic
- Employer contribution doubles your corpus
- 8.25% guaranteed is higher than PPF
- Only investment = steady salary deductions
Choose PPF
- Self-employed or freelancer (no EPF)
- Want to contribute beyond EPF maximum
- Additional tax-free savings beyond EPF
- Long-term safe corpus (15yr)
Frequently Asked Questions
EPF is better for salaried individuals because of employer contribution (essentially free money). PPF is better for self-employed or those wanting voluntary additional savings.
Both employee and employer contribute 12% of Basic+DA. Employee portion goes to EPF (3.67% to EPF, 8.33% to EPS pension scheme) from employer side.
Yes, if you have completed 5 years of continuous service. Withdrawal before 5 years attracts TDS.
Yes. PPF can be opened voluntarily by any resident (not NRIs). You can have both EPF (automatic) and PPF (voluntary) simultaneously.
₹1.5 lakh per financial year. Minimum is ₹500.