Investment Tips: A substantial fund will be ready for retirement! Increase your EPF contribution for significant benefits..

Investment Tips: Every working person worries about money after retirement. In such a situation, the Employees' Provident Fund (EPF) becomes a great support. This scheme not only protects your savings but also provides a pension after retirement.

Previously, employees used to contribute 12% of their basic salary and DA to the EPF, and the company contributed the same amount. But now the government has offered a new opportunity where you can contribute more of your entire salary. The question is, what benefits will this provide, and how can you use it?

Money worries will be alleviated upon retirement.
Contributing more to the EPF means you can deposit more money according to your salary. Previously, pension calculations were based on salaries up to Rs 15,000, but now you can contribute to your entire salary. This will increase both your EPF amount and pension upon retirement. Suppose your salary is ₹50,000. Previously, 12% was deducted from only ₹15,000, but now it will be deducted from ₹50,000, which will increase your corpus.

Many Benefits

This amount will grow over the long term because EPF earns interest every year and also benefits from compounding. If you make regular deposits for 10-20 years, you will accumulate a substantial sum upon retirement, which will become your greatest financial security. Additionally, EPF also comes with Employee Deposit Linked Insurance (EDLI), which provides insurance cover for your family in the event of your death.

Furthermore, under Section 80C of the Income Tax Act, you can avail tax deductions on EPF contributions up to ₹1.5 lakh per year. EPF interest and maturity amounts are also tax-free. If you deposit more, the tax savings will also increase, which is good news for your pocket.

EPF is not only your support, but also your family's. If you are not alive, you can avail yourself of benefits like a widow's pension and children's pension. Higher contributions will strengthen your family's security. Furthermore, you can withdraw funds from EPF during difficult times, such as for medical treatment, children's education, or buying a house. Having a higher balance will reduce your stress and provide peace of mind.

How to Increase PF Contribution
First, talk to your company's HR and tell them you want to contribute your full salary. HR will arrange for an additional deduction from your salary. If you want to save more, you can choose a Voluntary Provident Fund (VPF), where you can contribute more money as per your wish. VPF also offers the same interest and tax benefits.

Those who were in EPF before September 1, 2014, can fill out a joint option form for a higher pension. This form must be submitted jointly with the company so that the pension is based on the full salary. But keep in mind the time limit set by the EPFO. Higher contributions will reduce your take-home pay because deductions will increase. However, EPF withdrawals have limits, so keep your age, income, and needs in mind.

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