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Should I invest in Voluntary Provident Fund (VPF)?

Dhirendra Kumar discusses whether one should opt for VPF to exhaust the 80C limit

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I am falling in the 20% tax bracket. Should I invest in Voluntary Provident Fund (VPF) to utilise my 80C limit?
- Rajendra

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No, you shouldn't. Voluntary Provident Fund is a voluntary contribution to provident fund (PF) by employees beyond their mandatory deductions. You should invest in PF only to the extent that it is mandatory. It gives you exposure to fixed income.

So, if you invest in PF beyond the mandatory amount, you are actually losing out on returns, as equity turns out to be a far superior alternative.

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