What is the Difference Between EPF, VPF, and PPF? What are Their Tax Benefits?

Buy a Life Insurance Plan in a few clicks

Now you can buy life insurance plan online.

Kotak e-Term Plan

Protect Your family’s financial future with Kotak e-Term Plan. Know more

Kotak Assured Savings Plan

A plan that offer guaranteed returns and financial protection for your family. Know more

Kotak Guaranteed Savings Plan

A plan that offers long term savings and insurance in one premium. Know more

Kotak e-Invest

Insurance and investment in one plan with Kotak e-Invest. Know more

Kotak Health Shield

Insurance against medical expenses related to heart, brain, liver and Cancer. Know more

What is the Difference Between EPF, VPF, and PPF? What are Their Tax Benefits?

What is the Difference Between EPF, VPF, and PPF? What are Their Tax Benefits?
  • 27th Apr 2022 |
  • 2,992

Today, retirement planning is one of the major concerns among the youth. The increasing popularity of various retirement schemes and plans is a testament that retirement planning is a hot investment topic for the working youth. It is a smart decision to plan your retirement at the beginning of your career to gain the maximum out of the retirement plans. However, the market offering a heap of retirement plans generally confuses the individual trying to opt for one.

You have plans like Mutual Funds, Equity, NPS, ULIPs, PPF, EPF, VPF, Post Office Schemes, etc., among many other luring options. But for those who are at the beginning of their career, choosing the right option for such a long term can be very tricky. And before a young adult opts for one of these, they must be well-informed and well-prepared to make the right choice and pick the most suitable plan for their future.

One of the most confusing tasks is understanding the comparison: EPF vs. PPF vs. VPF. But fret not; this article will tell you all about PPF vs. VPF vs. EPF and how they differ from one another.

EPF vs VPF vs PPF | Definition and Working

1. Employee Provident Fund (EPF)

EPF is a provident fund created to provide financial stability and security to the employees of an organization in the long term, i.e. after retirement. As per the norms of this fund, employees can save a fraction of their basic salary each month. This fund can then be used by the employees later in their retirement.

As per the government regulations, it is mandatory for all working employees of organizations registered under EPFO (Employees’ Provident Fund Organization) to contribute as much as 12% of their basic + DA (Dearness allowance) or as much as ₹780/- towards the EPF. In addition to this, as soon as the employee deposits their contribution, the employer is liable to add the same amount to his EPF account.

EPF = 12% of basic from employee income + Employers contribution (12% of employee’s basic)

For organizations having more than 20 full-time employees, it is mandatory to participate in EPF. Other regulations are important too and must be read about. In addition to this, there are tax benefits linked to EPF, and they also earn you a decent interest and are a completely risk-free investment tool.

2. Voluntary Provident Fund (VPF)

In this type of Provident Fund, the applicant can voluntarily contribute any percentage of their salary to the fund account as per their wish. However, the PF contribution must be above the minimal 12% ceiling as per the government’s mandate.

The contribution in VPF is not obligated as it depends on the employee’s discretion. However, the interest offered would be the same as the EPF decided by the governing body and will be credited into the EPF account at maturity.

3. Public Provident Fund (PPF)

This is the PF scheme for the common person! Backed by the government, anyone working or non-working can invest in PPF. It is one of India’s most popular traditional savings schemes, which offers good returns, tax benefits, and safety. The main goal of the PPF is to help any individual make small savings and earn decent interest in them.

One can opt for the PPF schemes at any bank or post office. You can make small deposits as less as ₹500/- per annum to ₹1,50,000/- per annum.

Difference between VPF and PPF and EPF

Here are some of the key differences between EPF, PPF, and VPF, based on important criteria:




Interest Rate

8.75% per annum

8.75% per annum

8.7% per annum

Tax Benefit

Deductions of up to ₹1.5 lakhs per year under Sec 80C of IT Act

Deductions of up to ₹1.5 lakhs per year under Sec 80C of IT Act

Deductions of up to ₹1.5 lakhs per year under Sec 80C of IT Act

Period of Investment

Retirement/ Resignation whichever is earlier

Retirement/ Resignation whichever is earlier

15 years

Loan Availability

Partial withdrawals allowed


After 6 years allows 50% withdrawal

Employer Contribution on Basic + DA




Employee Contribution on Basic + DA




Taxation on Maturity Returns




Each plan brings along its share of pros and cons. Having understood the nitty-gritty of each scheme, you can prudently determine your retirement needs and opt for a plan that best aligns with your future goals.

Kotak e-Invest

In this policy, the investment risk in the investment portfolio is borne by the policyholder.


  • Return of Mortality Charges*$
  • Enhanced Protection
  • Multiple Plan Options
  • Zero Premium Allocation Charges
  • Tax Savings^

Ref. No. KLI/22-23/E-BB/521


Browse our library of resources

- A Consumer Education Initiative series by Kotak Life

Similar Articles

Do Pension Plans Allow any Death Benefits?

How To Choose The Right Pension Plan?

Calculating a Retirement Corpus that can Support Your Lifestyle

Are Annuities Great For Early Retirement?

Top Investment Options for Retirement Planning

Meaning of Sum Assured in a ULIP

How Does Pension Plans in India Works?

Retirement Planning at 50? You Are Still Good to Go

How To Calculate The Present Value And Future Value Of Annuities?

What are the 4 Financial Phases of Retirement? How to Budget For Each One?

Retirement Planning Guide: These 5 Steps Will Help You Towards a Safe, Secure and Fun Retirement

Save Early to Keep Living Your Dreams Post Retirement

Top 6 Flexible Benefits That ULIPs Offer

Retirement and Pension Plans in India- What are Your Options?

Un-Retirement - Are You Ready For It?

Benefits of Early Retirement Plans

ULIP Plan or Traditional Insurance Plans - Which is better?

What is Lock-In Period in ULIPs?

Here's What Retirement Would Look Like 30 Years From Now

ULIP Tax Benefits: यहां निवेश करने पर मिलते हैं 5 बड़े फायदे

Terminologies You Should Understand About Retirement Plans

How Quickly is Fund Switch Effected in ULIPs? Is it Done the Same Day or After a Particular Number of Days?

Inflation: A Key Factor to Consider into Retirement Planning

How Safe is it to Invest in ULIP plans?

What is the Death Claim Payable in the Case of ULIP?

Can NRIs Invest in ULIP Plans Offered in India?

What are the Differences Between ELSS ULIP and Mutual Funds?

ELSS vs ULIP: Which is a Better Investment?

What is the Estimated Return Percentage on ULIP? Do Investors Get Compound Interest?

Types of Annuity Plan | Annuity Definition - Meaning & Key Benefits | Kotak Life

Retirement: A New Start to Life!

5 Notable Investment Options for Retirees

10 Steps to Figure Out How Much Money You Will Need For Your Post Retirement Plans

At What Age Should You Start Your Retirement Planning?

Understanding Annuity Plans

Annuity Plan | How to Choose the Right Annuity Plan | Kotak Life

What are the Advantages and Disadvantages of ULIP?

Which are the Best ULIP Plans in India for Children?

Demystifying the Retirement Planning Process

यूलिप के फायदे (Benefits of ULIP in Hindi)

Worried About Running Out of Money in Retirement? 4 Tips to Avoid This Crisis

How to Build a Tax-Free Pension Income for Retirement?

Tips to invest your voluntary retirement scheme money

Is It Worth Buying ULIP Plans For 10 Years?

Ten Signs That You're Ready to Retire

Are You Planning an Early Retirement? Here's Why Buying Annuity Plan Will Make Sense

8 Charges in ULIP That You Must Know

FAQs on Taxation of ULIPs

Top 4 Mistakes To Avoid While Planning For Your Retirement

NPS for Housewife

Does Having Both ULIP Plan and Other Health Insurance Plan Make Sense?

How Can ULIPs Help You Plan for Your Child's Future?

Is it Suggestible to Take a ULIP Plan Linked with a Term Plan?

Best Insurance Plans for a Guaranteed Monthly Income After Retirement!

What are the things to consider before buying ULIPs?

Difference Between Unit-Linked Insurance Plans and Non-Linked Plans

Invest for your second innings with a guaranteed savings plan

What Are Mortality Charges In ULIP?

Top 6 Reasons Why You Should Get A Pension Plan

How Does NPS Work?

What are the minimum and maximum investment in ULIP? Would the Whole Amount Insured in The ULIP Insurance be Invested in the Market?

Different Types of ULIP Investments in India

ULIPs or Pension Plans – Which is a Better Retirement Plan?

What are the Chances of Losing all my Money in ULIP and How Much Return Should I Expect?

5 Reasons to Buy ULIP for a Secured Financial Future

What is a Retirement Plan - What are its Features?

Is ULIP a Good Option for People Above 60?

7 Secrets that can Make Your Post-Retirement Phase Prosperous

Different Types of Retirement Schemes

5 Steps to Gift a Smart Retirement Plan to Your Parents

Why are ULIPs One of the Best Tax Saving Instruments?

What To Do With Your Retirement Accounts During An Employment Lapse?

What is the difference between Life Insurance and ULIP?

Retirement Planning Guide for Working Men and Women

Which Is Better: ULIP or SIP?

How To Keep Your Retirement Accounts from Being Hacked?

What Are Superannuation Benefits?

What is Partial Withdrawal in ULIPs?

5 Retirement Planning Tips for a Financially Controlled Post-Employment Life

यूलिप के 8 शुल्क

How To Invest Money In ULIP?

How Has NPS Performed in Comparison with Other Instruments?

Who Gets the Benefit After the Maturity of ULIP: The Proposer or The Life Insured?

Pros and Cons of Retirement Annuities

Advantages of Pension Schemes and Retirement Plans

How Can I Achieve My Wealth Goal with ULIP Investment?

Saving for approaching retirement with retirement insurance

Is ULIP A Good Investment Option?

How Much Corpus Does One Need for Retirement?

Importance of financial Planning for Retirement

What is NAV in ULIP, and How is it calculated?

What is Fund Value in ULIP?

What tax benefits are there on saving for retirement?

A Quick Guide to Retirement Plans

Benefits of Early Retirement Planning in India

What is an Annuity Plan and How Does Annuity Plan Works | Kotak Life

Know Why You Should Stay Invested in Your ULIP Plan

What is ULIP and Its Benefits?

How should one decide on fund allocation within NPS?

What are the Benefits of ULIP - Explained

How Do Annuity Options Work In NPS

Types of Pension Plans for Your Retirement

Is it Advisable to Withdraw the ULIP Insurance Policy After 5 Years?

Retirement Planning for Millennials

What Happens If I Stop Paying My ULIP Policy Premium After Paying the First Premium? Will I Still Get The Return?

Important Questions To Ask Yourself Before Choosing A Good Retirement Plan

Benefits Of Retirement & How Investments Can Help You Enjoy Them

What Happens to ULIP Premiums Paid if the Market Crashes?

Looking for Ways to Earn Lifetime Income in Retirement? Here Are 6 of the Top Options

What is Premium Redirection in ULIPs Plans | ULIP Insurance Plans | Kotak Life Insurance

Single Premium ULIP or a PPF - Which One is Better?

What Are Retirement Pension Plans?

Is ULIP Better Than FD?

How To Make Most of Your Money After Retirement?

What are the Instruments Available for Building a Retirement Corpus?

Why You Should Invest In An Annuity Plan?

5 Reasons Why ULIP Plans are One of The Best Retirement Planning Instruments

6 Signs That You Are Not Financially Ready For An Early Retirement

Which Pension Plan Suits You best?

How to Choose the Best ULIP Plans to Invest in 2022?

Types of Retirement Plans

What are the Uses of ULIP?

What are the Rules for Exit From NPS?

What is the Minimum Lock-in Period for ULIP?

The Significance of Number 8,000 in Retirement Planning

Why ULIP Should Be a Part of Your Investment Portfolio?

Give Your Retirement Savings A Booster-Shot with Annuities

How Does ULIP Work in India?

How Is ULIP Different from Other Life Insurance Plans? Where Can I Invest - ELSS, ULIP, or PPF?

Is ULIP a Complex Financial Product?

Why Should You Invest in NPS?

What are the Maturity Benefits in a ULIP Plan: Fund Value Sum Assured or Only Fund Value?

Why Should You start Retirement Planning as soon as you start a job?

What are the Charges Levied on ULIP?

Long Term Investment Guide for Your Retirement

Why Should Retirement Planning Be on Top of Your Priority List?

How is ULIP NAV calculated? How is the return calculated in ULIP?

5 Common ULIP Myths That You Should Stop Believing

Retirement planning with a systematic life insurance plan

A Beginner's Guide to Understanding 401k Retirement Plan

How to Win at Retirement Savings?

Why Are ULIPs Called Flexible Investments?

Why Should I Invest in ULIP?

10 Steps to Figure Out How Much Money You Will Need After You Retire

Retirement Planning - How To Calculate Your Retirement Premium in India?

How can NPS help you save tax?

What are ULIPs and their Types?

ULIP: Can You Surrender ULIPs or Withdraw Money from It?

How has ULIP Grown Over the Last 3 years?

Importance of Retirement Planning

Getting Close to Retirement? Six Key Retirement Planning Tips That Can Help You Retire

Do ULIPs Give Good Returns On Investments?

Can I Surrender My ULIP Policy after 2 Years?

Is the ULIP Policy Surrender Value Taxble?

Top 4 Myths About ULIP Investments You Should Know

Managing Your Retirement Income with an insured retirement plan