What is PPF Account? Difference Between PPF, EPF & EPS Account [Explained]

Note (September 2026): From 1 April 2026, India’s Income-tax Act, 2025 replaced the Income-tax Act, 1961. Most of the deductions mentioned below continue under new section numbers (for example, the Section 80C deduction of up to ₹1.5 lakh is now in Section 123), and most of them can be claimed only under the old tax regime, while the new regime is the default. Check the Income Tax Department’s website for the current rules before you file.

PF is the common name for EPF or Employees’ Provident Fund. It is an administration laid out reserve funds conspire for representatives of the coordinated area.

The EPF interest cost is proclaimed consistently by the EPFO (Employees Provident Fund Organization) which is a statutory body under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

What is PPF Account – PPF Account Meaning Explained in Detail

The EPF interest rate is declared each year by the EPFO and approved by the government, so it changes from one financial year to the next. Check the rate for the current year on the EPFO website rather than relying on a figure quoted in an article. Just workers of organizations enlisted under the EPF Act can put resources into the EPF or PF.

Both the employer and the employee are required to contribute 12% of the employee’s basic salary plus dearness allowance to the EPF account each month. Note that the employer’s share is split — part of it goes to the Employees’ Pension Scheme (EPS) rather than all of it to EPF.

PPF or Public Provident Fund is an administration upheld reserve funds conspire. It is available to everybody – utilized, independently employed, jobless, or even resigned. PPF is voluntary and open to any resident individual. Deposits must total at least Rs 500 and no more than Rs 1,50,000 in a financial year.

It has a decent return which is set by the public authority each quarter. You can open a PPF account with the post office or most significant banks. The PPF interest rate is evaluated each quarter. The PPF interest rate is set by the government and reviewed every quarter, so it can change during the year. Confirm the rate for the current quarter with India Post or your bank before calculating returns.

EPF Vs PPF Comparison – Eligibility, Limits, Tenure, Interest Rate, Tax Benefits

Safety

Both are protected because of legal sponsorship. Be that as it may, EPF is less secure because of its equity exposure in it.

• Both the EPF and PPF are government-supported investment funds instruments
• The EPF is overseen by a legal body called the EPFO while the PPF is overseen straight by the government
• 15% of the fresh money gathered by the EPFO consistently is contributed to disparities. The rest is put resources into government bonds
• The EPFO announces the EPF rate consistently founded on the profits of the EPF corpus. The EPF rate is declared annually by the EPFO and the PPF rate is revised quarterly by the government, so the two move independently and neither should be quoted from an article. Historically the EPF rate has tended to sit somewhat above the PPF rate, but that gap has narrowed at times and is not guaranteed. Check the EPFO and India Post for the figures that apply today.

In any case, the value openness in the EPF makes it powerless against market developments. A breakdown in the market might make it challenging for the EPFO to keep up with the EPF interest rate.

The profits of PPF are fixed and dependable by the public authority. The specific rate is set each quarter. Generally, rates have changed by around 8% per annum. For example, the PPF rate for Q2 (July–September) of FY 2022-23 was 7.1% — a historical figure quoted here only to show how the quarterly revision works, not the rate in force now. Here is a short history of PPF rates :

Liquidity

EPF is more fluid. Withdrawals from PPF are just permitted after the expiry of a long time from account opening.

EPF Withdrawal

• You can withdraw 75% of your EPF corpus in the event that you have been jobless for a time of one month. Assuming your joblessness reaches out for two months, you can withdraw the whole EPF corpus. In any case, note that assuming you withdraw your EPF corpus in the span of 5 years of record opening, the withdrawal will be available
• You can likewise essentially leave the cash in the EPF account regardless of whether you become jobless or take up independent work or work in a disorderly area. For this situation, the EPF balance will keep on procuring interest however a similar will be available. Following three years, the record will quit acquiring an interest
• The EPF retirement age is 58. After achieving this age, you can withdraw the majority of your corpus. Be that as it may, a piece of the EPF corpus that is utilized for the Employees’ Pension Scheme (EPS) will be paid to you as an annuity and a similar will be available
• You can likewise make partial withdrawals from the EPF. In any case, you need to determine the justification for the withdrawal and can’t involve the removed assets for some other reason. You don’t need to return the sum withdrawn. These partial withdrawals are named as advances against EPF in like manner speech. Nonetheless, the office really offered is halfway withdrawal. Different grounds for partial withdrawal carry different waiting periods. You can figure out additional about them here.

PPF Withdrawal

• On account of PPF, you can’t withdraw cash because of joblessness. PPF accounts have a term of 15 years. Partial withdrawals from a PPF account are not available in the early years — there is a lock-in first, and once withdrawals do open up the amount you can take out is capped. You do not have to give a reason for a partial withdrawal, but the year from which one is permitted and the cap that applies are set by the scheme rules, so confirm the current position with India Post or your bank rather than relying on a figure quoted in an article. Nonetheless, the amount available for partial withdrawal is capped.
• Likewise, it is recommended that one ought to check with the particular site of the bank to decide when the fractional withdrawal is permitted. A few banks, like ICICI and Axis, permit withdrawals following 5 years and a few following 7 years (SBI and HDFC)
• The most extreme sum that can be removed each monetary year is the lower of the accompanying:

1. 50% of the record balance as toward the finish of the monetary year, going before the ongoing year, or
2. 50% of the record balance is toward the finish of the fourth monetary year, going before the ongoing year.

• You can likewise get a credit against the balance in the PPF account from the third to the sixth year after account opening. The greatest measure of advance that can be profited against PPF accounts is 25% of the balance toward the finish of the second monetary year going before the year in which the credit was applied for

Tax assessment

EPF withdrawal becomes available whenever removed before 5 years of finished assistance. PPF withdrawal isn’t available.

Your own EPF contribution qualifies for a deduction under Section 80C of the Income Tax Act, within the overall Section 80C ceiling of Rs 1,50,000 per year. It is the contribution that earns the deduction, not the interest. Only the employee’s own contribution qualifies for this deduction — the employer’s contribution is not something the employee claims under Section 80C. The deduction is available only under the old tax regime; it is not available under the new regime. Interest credited to the EPF account is normally exempt from tax, but that exemption is subject to conditions and to contribution thresholds set by the government, and interest credited after you stop working can become taxable.

EPF withdrawals are normally exempt from tax once you have completed five years of continuous service. If you withdraw before completing five years and the amount is more than Rs 50,000, TDS applies. Rates and exemptions here depend on your circumstances, so confirm the position with the EPFO or a tax professional before withdrawing.

Deposits into a PPF account, up to Rs 1,50,000 per year, qualify for a deduction under Section 80C of the Income Tax Act, 1961 — again, it is the deposit that earns the deduction, not the interest. This too is available only under the old tax regime. The interest on the PPF is likewise excluded from charge yet should be proclaimed in the yearly personal government form. The PPF development sum is additionally exempt from tax. At the end of the day, PPF appreciates ‘absolved, excluded, excluded’ charge treatment.

Downsides of PPF

• PPF doesn’t permit partial withdrawals before the expiry of 5 years after the extended time of record opening. You can’t withdraw from the PPF before this period regardless of whether you are jobless or need cash for some family crisis. The residency of the PPF at 15 years is additionally extremely lengthy
• PPF generally has had a lower interest rate than EPF
• The PPF rate is fixed and long term can give a lot of lower returns than value-connected instruments like shared assets and NPS (National Pension System)

Downsides of EPF

• EPF is simply open to workers of organizations that have enrolled under the EPF Act. This implies organizations with 20 specialists or more. It isn’t accessible to independently employed or retired people
• The EPF commitment is inflexible and fixed at 12% of pay and DA from the business and worker. You can’t offer not exactly this sum, in spite of the fact that you can offer more to VPF (Voluntary Provident Fund)
• Withdrawal before a long time from account opening of EPF is available. In the cutting-edge economy, many individuals can’t keep a task in an EPF-enlisted organization for quite a long time
• Assuming you transfer jobs from huge to little organizations or become independently employed, you can’t add to the EPF. In such a case, the EPF will quit procuring interest following a long time from your exit from the EPF-enrolled business. Your cash will lie inactive in the EPF account
• The EPF rate may not match the drawn-out returns of Mutual Funds or the National Pension System (NPS)

Conclusion

PPF and EPF are both government-supported plans which are exceptionally conventional. These are utilized as duty-saving choices that are covered under Section 80C of the Income Tax Act, 1961. The sovereign assurance makes these plans alluring and people can pick the one that best suits their requirements.

Interest rates on EPF and PPF are set by government and revised periodically — EPF annually by the EPFO, PPF quarterly. Contribution limits and tax rules can also change at Budget. Confirm current figures with the EPFO, India Post or your bank before making a decision; this article is general information, not financial advice.

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