The Voluntary Provident Fund (VPF) is an extension of the Employees’ Provident Fund (EPF) that allows employees to voluntarily contribute more than the mandatory 12% of their basic salary and dearness allowance towards their provident fund account. VPF Rules serves as a tax-free savings avenue, offering financial security upon retirement.
VPF functions as an additional contribution under the EPF framework and follows these basic rules:
Enrolling in VPF is a simple process:
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Contributions to VPF are deducted directly from the employee’s salary before it is credited to the bank account. The employer then deposits the contributions into the employee’s EPF account. Since VPF contributions are voluntary, employees can revise or stop their contributions at the beginning of the financial year.
To be eligible for VPF, an employee must meet the following criteria:
VPF contributions and their earnings are tax-exempt under specific conditions:
VPF withdrawal follows certain rules based on the tenure of contribution:
The interest rate on VPF is the same as EPF and is determined annually by the EPFO.
Yes, but it will be subject to taxation unless it is withdrawn for specific emergency purposes.
You can contribute up to 100% of your basic salary and dearness allowance.
No, the employer is only responsible for the mandatory EPF contribution.
You need to inform your employer and submit a request at the beginning of the financial year.
No, VPF contribution changes are typically allowed only at the start of a financial year.
Yes, VPF is a secure investment with a high-interest rate, making it ideal for retirement savings.
Submit a withdrawal request through your employer or the EPFO online portal.
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