There are many options available in the investment market today, but when it comes to retirement of a salaried person, two options mainly emerge: Employees Provident Fund (EPF) and National Pension System (NPS). Both are schemes under the central government and by investing in them properly, a good fund is also accumulated till retirement. Let us know which of the two plans is better……
Return: Guaranteed return is given by the government on EPF, which is announced by the government at the end of the year. The returns in NPS depend on the equity allocation. If you have taken a plan with high equity, then you can get good returns in the long run but with higher returns, the risk here also increases as compared to EPF.
Investment options: You cannot choose to invest in EPF. Your money gets deposited in a fixed fund. At the same time, NPS has four options in front of you, you can choose the investment option according to your risk. In this, you can choose the option of Equity, Corporate, Debt etc.
Withdrawals: In EPF, you can partially withdraw your deposits for home loan repayment, medical emergencies, etc. While in NPS, you can withdraw up to 25% of the deposit amount after 3 years of starting investment.
Tax benefits: You get income tax exemption for investing up to Rs 1.5 lakh annually in EPF, while the annual interest earned on it up to Rs 2.5 lakh is also tax free and the entire amount received on withdrawal is tax exempt. Is. On the other hand, if you invest an annual amount of up to Rs 1.5 in NPS, you get tax exemption. On maturity, 60 per cent of the amount would have been tax free while 40 per cent would be converted into an annuity on which tax is to be paid.