The Central Government made a major announcement on 13 May under the Self-Reliant India Package. In this, the government had made an announcement giving more salary in the hands of the employees and giving relief to the employers also in paying the outstanding PF. The government had announced to reduce the contribution of EPF of the employee and the institute from 12-12 per cent to 10-10 per cent for the next three months. The Finance Minister said that 6.5 lakh institutions and 4.3 crore employees will benefit from this scheme. Also, with this scheme, employers and employees will get liquidity of Rs 6750 crore in three months.
For your information, please tell that due to decrease in EPF contribution, the employee will get more salary, but it will also affect the retirement fund of the employee. Basic salary + four percent of DA + will be deposited in the employee's retirement fund for three months. Even if this amount seems small now, it will be quite large at the time of maturity in long term investment. Apart from this, an employee may have to go to other tax-saving investment schemes to take full advantage of the tax exemption provided under Section 80C of the Income Tax Act. According to SEBI Registered Investment Advisor Jitendra Solanki, people who currently have enough cash, can give enough cash for their retirement fund. They can compensate the loss to the retirement fund through VPF. Also they can go for PPF.
Know what is VPF
VPF i.e. Voluntary Provident Fund is also a retirement planning scheme. It is a scheme similar to EPF. Only salaried employees registered in EPFO can invest in VPF. Investment in VPF can be started by requesting to start an additional contribution for this scheme in the company's HR or PD department. In VPF, an employee can invest a maximum of 100% of his basic salary and DA. After registering for a VPF account, a fixed amount is deducted from the salary. Here the employee gets returns according to the interest rate fixed by the government. Under Section 80C of the Income Tax Act, income tax exemption of up to 1.5 lakh is available in the investment on this scheme.
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