Section 1: Introduction to EPF, GPF, NPS, Pension, and Gratuity
As an employee in India, it’s important to have a solid understanding of the various funds and schemes that are available to you. In this guide, we will explore the main ones: Employees Provident Fund (EPF), General Provident Fund (GPF), New Pension Scheme (NPS), Pension, and Gratuity.
EPF and GPF are both schemes designed to help you save money for your retirement. EPF is applicable to employees of private sector organizations, while GPF is applicable to government employees. These funds allow you to make regular contributions towards your retirement and earn interest on those contributions.
Section 2: Calculation Formulas and Methods for EPF, GPF, Pension, and Gratuity
Calculating your EPF, GPF, Pension, and Gratuity can seem daunting, but it doesn’t have to be. Here are some formulas and methods to help you:
- EPF Calculation Formula: (Basic Salary + Dearness Allowance) * 12%.
- GPF Calculation Formula: (Basic Salary + Dearness Allowance) * 6%.
- Pension Calculation Formula: (Average Salary * Years of Service) / 70.
- Gratuity Calculation Formula: (Last Drawn Salary * Years of Service * 15 / 26).
Section 3: Comparison of EPF, GPF, NPS, and PPF
EPF, GPF, NPS, and PPF are all different schemes with their own unique features. Here’s a comparison:
- EPF: Provides a lump sum payment on retirement.
- GPF: Allows withdrawals for specific purposes like education or medical emergencies.
- NPS: Offers a choice of investment options and flexibility to change the scheme.
- PPF: Offers attractive interest rates and tax benefits.