New Delhi: Employees’ Provident Fund (EPF) is a retirement savings scheme, managed bY Employee Provident Fund Organization. It is a government scheme aimed to build retirement corpus for private employees workering in the organized sector. Under this scheme, both employee and employer have to mandatorily contribute to the EPF account of salaried employee.
Interest Rate of EPFO
Currently EPFO is providing an interest rate of 8.25 per cent compounded annually on EPF accounts. However, the central government sets the interest rates for Employees’ Provident Fund (EPF) on an annual basis. So if you are wondering how much will retirement corpus you will build on your contribution, then check the calculation on different salaries.
Retirement Fund for Different Salary
Assuming contributions begin at age 25, with a starting contribution rate of 12% that increases by 10% each year, here are the projected retirement corpus figures you will receive Salaries of Rs 12,000, Rs 15,000, and Rs 20,000:
– For a basic salary of Rs 12,000: Total contributions amount to Rs 93.67 lakh, interest earned is Rs 1.61 crore, and maturity amount is Rs 2.54 crore.
– For a basic salary of Rs 15,000: Total contributions amount to Rs 1.17 crore, interest earned is Rs 2.01 crore, and maturity amount is Rs 3.18 crore.
– For a basic salary of Rs 20,000: Total contributions amount to Rs 1.56 crore, interest earned is Rs 2.68 crore, and maturity amount is Rs 4.24 crore.
Contributions up to Rs 1.50 lakh per financial year are exempt from taxes within the EPF framework. Additionally, the interest earned and the maturity amount are also tax-free.
Till when you receive interest?
You can keep money in the EPF account even if you become unemployed or switch to self-employment, or work in the unorganized sector. During this period, your EPF balance will continue to accrue interest, which will be subject to taxation. However, after three years, the account will no longer earn interest.
Stories
Click to read in detail
EPFO scheme
What is VPF and how to opt for it
ITR filing 2024-25
What is nil income ITR and how to file it
Credit card default
How to avoid ‘plastic grenades’
PM Kisan beneficiary
How to check PM Kisan beneficiary status
Sectoral Funds
Equity sectoral mutual funds explained
EPFO is providing an interest rate of 8.25 per cent compounded annually on EPF accounts. So if you are wondering how much will retirement corpus you will build on your contribution, then check the calculation on different salaries. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
