Difference between Employees Provident Fund (E.P.F) and Public Provident Fund (P.P.F) And the (G.P.F.) General Provident Fund
The Government with a view to secure post retirement life of
employees formed an organization named Employees Provident Fund
Organization (EPFO). This organization is responsible to manage Provident
fund which aims to secure future with stable returns after retirement
or certain age.
But EPFO is only for salaried individuals, for other
professionals there is a scheme called Public Provident Fund (PPF)
which is maintained by Post Office or few specified banks.
In India
there are three types of provident fund
Employee Provident Fund (E.P.F)
Public Provident Fund (P.P.F)
General Provident Fund (G.P.F./V.P.F)
Each type of fund has different features but with same motto
of providing retirement benefits to the contributor.
Let’s see the each scheme individually:
What is Employee Provident Fund (E.P.F)?
The Employee Provident Fund, or provident fund as it is
normally referred to, is a retirement benefit scheme that is for
organized and unorganized sector (Private Sector) employees.
In case employee wishes to contribute more than the
mandatory amount, he can do so by opting for Voluntary Provident Fund (V.P.F).
This is beyond employee EPF contribution of 12%. Also Employee contribution
towards VPF does not bound employer to contribute to this VPF. Maximum
contribution into VPF can be upto 100% of Basic Salary including Dearness
Allowances. This would carry same rate of interest of E.P.F. The amount
would be credited to E.P.F account and there is no separate account for V.P.F.
What is Public Provident Fund (P.P.F)?
PPF is established by central government to secure future of
non-salaried employees, such as consultant, freelancer, contractor etc, even an
unemployed person can open P.P.F account with a nominal amount of
Rs.100.
What is General Provident Fund (G.P.F)?
General Provident Fund is only for Government Employees.
Under this scheme government employees contribute a specific amount which is
decided by the Government but there is no contribution from Government side. As
per the Govt Service Rules the G.P.F Contribution not less than 6.5% of the total
salary ,which can contribute by the employee from his side.
