Investment

EPF

Employees' Provident Fund — mandatory salary-linked retirement scheme with 12% employee + 12% employer contribution and current 8.25% interest.

Definition

EPF is the mandatory provident fund for salaried employees at organisations with 20+ employees. Employee contributes 12% of basic salary; employer matches with 12% (of which 8.33% goes to EPS pension scheme up to ₹15K salary, rest to EPF). Interest is government-notified and currently 8.25%, credited annually.

Tax treatment is EEE for contributions, interest, and maturity if held to retirement or at least 5 years of continuous service. Early withdrawal before 5 years is taxable. EPF qualifies for 80C deduction automatically — for someone with ₹50K basic salary, EPF alone fills ~₹72K of the ₹1.5L 80C limit.

Example

Basic salary ₹50,000/month, current EPF ₹0, retire in 30 years with 5% annual increment at 8.25% → corpus ≈ ₹2.3 crore.

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