EPF Calculator: What will be maturity amounts on basic salaries of Rs 20,000, Rs 30,000 and Rs 40,000?
EPFO: An employee can contribute up to 12 per cent of their basic salary and dearness allowance (DA) to their EPF account. The employer also contributes an equal amount, but its amount is distributed in two parts. While 3.67 per cent of it goes into the EPF account, 8.33 per cent goes to the Employee Pension Scheme (EPS) account. The EPF offers a lot of tax benefits. Deposits up to Rs 1.50 lakh in a financial year are tax-exempt under Section 80C of the Income Tax Act.
EPF Interest Calculation: Employees' Provident Fund (EPF) is a popular retirement planning scheme in India aimed at providing a retirement corpus to its account holders. The employee and the employer invest monthly in the former's EPF account. The employee gets compound interest on total investments. The current interest rate is 8.25 per cent annually, which is subject to change. An employee can contribute up to 12 per cent of their basic salary and dearness allowance (DA) to their EPF account. The employer also contributes an equal amount, but its amount is distributed in two parts. While 3.67 per cent of it goes into the EPF account, 8.33 per cent goes to the Employee Pension Scheme (EPS) account.
The EPF offers a lot of tax benefits. Deposits up to Rs 1.50 lakh in a financial year are tax-exempt under Section 80C of the Income Tax Act.
Interest earned and the maturity amount are also tax-free.
At retirement age, the account holder gets a lump sum and a monthly salary.
In this write-up, know what the maturity amounts will be on basic salaries of Rs 20,000, Rs 30,000, and Rs 40,000.
For calculation, we will put certain conditions. EPF account holders will start contributing at the age of 25. Each will get a five per cent annual salary increment on an annual salary increment of five per cent, and all of them will contribute 12 per cent of their basic salaries and DAs till the age of 60.
Starting with Rs 20,000 monthly salary
If one has a starting basic salary of Rs 20,000 at 25 years of age, contributing 12 per cent of their basic salary and expecting a five per cent increment in their salary every year, they will contribute Rs 36,04,312 in their EPF.
Their return on this investment will be Rs 1,08,79,549, and the estimated maturity amount will be Rs 1,44,83,861.
Starting with Rs 30,000 monthly salary
In this scenario, the EPF contribution will be Rs 54,06,168, the interest earned will be Rs 1,63,18,569, and the expected maturity amount will be Rs 2,17,24,737.
Starting with Rs 40,000 monthly salary
If one starts with a basic monthly salary of Rs 40,000, they will invest a total of Rs 72,08,492, the interest earned will be Rs 2,17,58,595, and the maturity amount will be Rs 2,89,67,087.
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