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Relying Just On EPF? Here’s How To Achieve Rs 1.5 Crore Before Retirement
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The EPFO offers 8.25% annual compound interest, while SIPs are market-linked with higher potential returns but also risk. Proper planning ensures a secure retirement
The key benefit of EPF investments is that up to Rs 1.50 lakh is tax exempt per financial year. (Representative/Shutterstock)
As the concern for retirement looms large over every employed individual, the question of financial security post-retirement is a pressing one. Without a job, expenses remain unchanged, and relying solely on the Employees’ Provident Fund (EPF) may not suffice.
Here’s how individuals can prepare for old age while still working:
What Is EPF?
The Employees’ Provident Fund (EPF), managed by the EPFO, is a retirement investment plan where employees contribute up to 12% of their basic salary and DA monthly. Employers match this contribution, with a minimum of Rs 1,800 and a maximum of 12% of the employee’s basic salary and DA.
Of this 12 percent, 8.33 percent goes to the EPF, while the remaining 3.67 percent is allocated to the Employees’ Pension Fund (EPS), which provides a monthly pension upon retirement.
The EPFO offers an annual compound interest rate of 8.25 percent on these contributions. Employees also have the option to exceed the 12 percent contribution limit, with the excess amount being credited to the Voluntary Provident Fund (VPF). The key benefit of EPF investments is that up to Rs 1.50 lakh is tax exempt per financial year under Section 80C of the Income Tax Act, 1961, and the interest earned and maturity amount are tax-free.
EPF falls under the exempt-exempt-exempt (EEE) category. However, in VPF, tax exemption applies only up to 12 percent of the basic salary and DA, with returns on contributions above this amount being taxable. Given these significant tax benefits, experts often recommend investing up to the 12 percent limit.
Understanding SIP
Another investment option to consider is a Systematic Investment Plan (SIP) in mutual funds. SIPs allow individuals to invest a predetermined amount daily, monthly, quarterly, or annually. The investment amount can be increased annually through top-up SIPs. SIPs offer rupee-cost averaging, where the net asset value (NAV) fluctuates with market conditions.
When the market is high, fewer SIPs are purchased, but the investment value increases; when the market is low, more NAVs are acquired, but the investment value decreases. Additionally, SIP investments benefit from compounded growth, allowing investments to grow exponentially over time.
Investors who prefer smaller, regular contributions over lump sum investments often choose SIPs.
EPS vs SIP: How To Reach Rs 1.5 Crore Target Faster
Comparing EPF and SIP, if one aims to reach a retirement goal of Rs 1.50 crore, it’s essential to note that EPF offers guaranteed returns in the form of interest, whereas SIP is market-linked with potentially higher returns but also risks of negative returns if the market falls.
Since the exact returns of a SIP are uncertain, a standard 12% return is assumed for calculation purposes.
If one starts contributing at the age of 25, continuing until 60, EPF will require a monthly investment of Rs 6,350 to achieve a corpus of Rs 1.50 crore, yielding Rs 1,50,29,133.18 after 35 years.
Conversely, with SIPs, a monthly investment of Rs 6,350 starting at age 25 can reach the Rs 1.50 crore goal in 27 years, with an investment amount of Rs 20,57,400 and long-term capital gains of Rs 1,34,15,875, totalling Rs 1,54,73,275.
September 23, 2025, 18:32 IST
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Chip relief: China allows exports of Nexperia chips for civilian use; move to ease global auto supply strain – The Times of India
China has granted exemptions to export controls on Nexperia chips for civilian applications, its commerce ministry said on Sunday, signalling a potential easing of pressure on the global auto industry hit by supply shortages following earlier curbs, Reuters reported.The announcement marks Beijing’s strongest indication yet that it will relax restrictions imposed after the Dutch government took control of Nexperia, a key supplier of basic chips used in automotive electrical systems.Nexperia, based in the Netherlands but owned by China’s Wingtech Technology, had been at the centre of a trade standoff that disrupted global chip supplies. The Chinese ministry did not define what constitutes “civilian use,” but the move comes after German and Japanese companies said deliveries of Nexperia’s China-made chips had resumed.Despite the exemptions, China–Netherlands relations, and by extension ties with the European Union, are expected to remain strained until the dispute over Nexperia’s ownership and operations is resolved.The Dutch government seized control of the company on September 30, citing concerns that Wingtech’s plans to shift production to China posed a threat to European economic security.In response, China halted exports of Nexperia’s finished chips, which are primarily packaged in China, but last week said it would start accepting applications for export exemptions following a meeting between US President Donald Trump and Chinese President Xi Jinping on October 30.China’s commerce ministry reiterated that it aims to protect global chip supply chains, while accusing the Netherlands of failing to act to resolve the standoff.In its statement Sunday, the ministry urged the European Union to “intensify efforts” to persuade the Netherlands to reverse its decision.“China welcomes the EU to continue leveraging its influence to urge the Netherlands to promptly rectify its erroneous actions,” the ministry said.
Eimear DevlinBBC Money Box reporter
Eve CravenThe UK’s tax body is reviewing its decisions to strip child benefit from about 23,500 claimants after it used travel data to conclude they had left the country permanently.
Normally the benefit runs out after eight weeks living outside the UK, but many people affected complained that HM Revenue & Customs (HMRC) had stopped their money after they went on holiday for just a short time.
The move came after MPs on the Treasury Select Committee demanded answers from the tax authority.
HMRC has apologised for any errors and says anyone who thinks their benefits have been stopped incorrectly should contact them.
In September, the government began a crackdown on child benefit fraud which it believes could save £350m over five years.
The new system allows HMRC records to be compared with Home Office international travel data, and the tax authority had used this data to stop payments to thousands of families.
But it is now reviewing all of the cases following a growing number of complaints from people affected who said they had been on holiday, and had returned to the UK after a short time.
Eve Craven went on a five-day break with her son to New York. She told the BBC’s Money Box programme that about 18 months after the trip she received a letter saying the child benefit for her son had been stopped.
The letter cited her trip to the US, saying it had no record of her return.
“It gave me a month basically to give them all the requested information to prove that I’d come back to the UK,” she said.
“It’s just a very big ask for something that they’ve messed up on, and they should have been able to sort out themselves.”
Eve’s child benefit has now been reinstated with missing payments backdated.
The issue was first identified in Northern Ireland, where some families had flown out of the UK from Belfast, but then returned to Dublin – which is in the EU – before driving home over the border.
UK and Irish citizens can travel freely into each other’s countries under the Common Travel Area arrangement.
There are no routine passport checks when travelling through the border between Northern Ireland and the Republic of Ireland, meaning the UK government has no data to show that someone may have returned to Northern Ireland.
It is not clear how many errors have been made in total, or how.
HMRC told Money Box it would be reviewing all past cases “using PAYE data and where continued UK employment is found, will be reinstating payments and making any back payments necessary”.
It is aiming to complete its review by the end of next week.
MPs on the Treasury Select Committee are also now investigating.
Additional reporting by Nick Edser
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Mumbai ITAT rules compensation for flat delivery delays is not taxable under Section 50C. Experts say this offers relief to taxpayers facing project delays.
Section 50C Can’t Apply Without Actual Property Transfer, Rules Mumbai ITAT
In a significant ruling, the Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has held that compensation received for delay in construction or delivery of a flat cannot be taxed under Section 50C of the Income Tax Act. The tribunal clarified that such compensation is distinct from sale consideration and does not attract stamp valuation provisions.
The tribunal also emphasised that the delay compensation is essentially a form of interest paid by the builder for the inconvenience caused to the homebuyer due to delayed possession. As such, it is taxable under ‘Income from Other Sources’, in line with provisions applicable to interest income, and is subject to tax at the individual’s slab rate.
Commenting on the ruling, Anita Basrur, Partner at Sudit K. Parekh & Co. LLP, said the decision “clearly brings out that sale consideration and compensation are different.” She explained that Section 50C applies only when the sale consideration for a transfer of immovable property is lower than the stamp duty value. “In this case, the transfer involved a flat received in exchange for land, and the additional compensation was purely compensatory — not a sale consideration,” Basrur noted.
She added that the judgment offers timely relief for taxpayers amid rising cases of project delays and associated compensation payments. “With delays in projects and compensation becoming common, this decision will give the desired relief to purchasers and help settle several pending disputes,” she said.
CA Akshay Jain, Direct Tax Partner at NPV & Associates LLP, echoed similar views, clarifying the tax treatment of such payments. “Since there is no transfer of any capital asset at the time of receiving compensation for delayed possession, it cannot be taxed under capital gains,” he said. Jain added that such payments are “taxable under the head ‘income from other sources’,” not as capital receipts.
On the applicability of Section 50C to extinguishment of development rights, Jain explained that the section requires an actual transfer of land or building. “In case of extinguishment of development rights, there is no transfer of immovable property, so Section 50C cannot be invoked,” he said, citing the Mumbai ITAT’s ruling in Suvarna Chandrakant Bhojane vs ITO that supported this interpretation.
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More
November 09, 2025, 16:43 IST
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