NPS is more beneficial than EPF
Is NPS better than EPF?
The NPS is more complicated than EPF, but it may ensure a sufficient retirement kitty
If there’s one investment option that has received generous tax breaks in the Budget, it is the National Pension System (NPS). In a watershed move, the Finance Minister has also announced that employees in the organised sector will now be able to opt out of contributions to the Employees Provident Fund (EPF) and invest in the NPS instead. So, if given this choice, what should you do? Here’s how they compare.
Contributions
EPF contributions are mandatory for employees earning up to ₹15,000 a month in the organized sector. Many employers however insist on EPF contributions for all their employees. The contribution is pegged at 12 per cent of your pay (basic plus dearness allowance). Your statutory EPF contributions are matched by your employer. If you are an employee who usually struggles to save, the EPF is a good option for you as it forces you to save at least 12 per cent of your pay.
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