New Delhi. Every common man wants to become a millionaire. To reach this goal, he puts in both hard work and tricks. However, even then many people are not able to achieve their goal. But do you know that even with PF deducted from salary, you can become a millionaire.
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Today we will tell you how your small contribution in PF can make you a millionaire. For your information, let us tell you that there is no tax on the contribution made in EPF up to Rs 1.50 lakh every year. Apart from this, after contributing for more than 5 years, the maturity amount also becomes out of the tax net.
How to become a crorepati from PF
If we assume that you started work at the age of 21 and your basic monthly income and DA is Rs 25,000 then you can retire with Rs 1 crore in PF account. As per the existing EPFO rules, every employer has to put 12% of basic salary and DA in PF. The same amount is also deducted every month from the salary of the employee, from which the prepared fund is withdrawn at the time of retirement. Out of the employer’s 12 per cent, 8.33 per cent goes towards pension funds and only 3.67 per cent is invested in EPFO.
The government has fixed an annual interest rate of 8.1 percent on PF for 2022-23. If you keep getting the same interest rate and you do not withdraw your money till retirement, then at the time of retirement Rs 1 crore will be accumulated in your account.
How much will the fund increase when the salary increases,
if you invest in the PF fund from the age of 21 to 60 years and you get 8.1 percent annual interest on it, then after 39 years you will have a corpus of Rs 1.35 crore. If your salary increases by 5 percent every year, then it will be Rs 2.54 crore. With an annual growth of 10 per cent, this will increase to Rs 6 crore. Remember that all this calculation has been done on the basis of prevailing interest rate. It keeps on changing from time to time. Apart from this, you will not have to make any partial withdrawals in the middle to reach this goal.
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