Saving for retirement is the last goal on the financial road that a salaried employee expects. That’s where Employee Provident Fund becomes important. Employee Provident Fund sounds attractive with your employer matching your contribution and a tax free guaranteed return of 8.5%. Assuming you are 25 years and earn 20000 per month, if you contribute 12% of your basic plus dearness allowance every month, and the employer matches with his contribution, by the time you retire, you would be able to save 1.38 crore (assuming that the interest rates remain the same 8.5% and you get a modest salary hike of 5% every year).

Your entry in the EPF book of accounts is under your current employer and you are eligible to take the amount from your EPF account two months after you quit the job. Instead of withdrawing the amount, you can also transfer the amount to your new EPF account created under your new employer. The process of transferring your PF amount will ideally take 30 days.

Keeping the advantages of EPF in mind the Government of India has introduced VPF – Voluntary Provident Fund contribution.

Voluntary Provident Fund (VPF): VPF is a safe option wherein you can contribute more than the PF ceiling of 12% that has been mandated by the government. This additional amount enjoys all the benefits of PF except that the employer is not liable to contribute any extra amount apart from 12%. An added advantage is that the interest rate is equal to the interest rate of PF and the withdrawal is tax free. Please note that the maximum contribution towards VPF is 100% of your Basic. The highest rate of interest (close to 9%) makes it a very attractive saving scheme. Because of these advantages many  employees chose not to close their PF account even after getting employment else where other than India. Employees also get a major tax break on their entire contribution to the fund (tax rebate under section 88 ) up to a ceiling of Rs. 70,000/-

Other benefits include -  employees can take a loan against the amount accumulated in the fund. However availing of loans depend on permissible rules and circumstances and they can access money for reasons such as housing, marriage, children’s education etc. An employee can withdraw the VPF amount in between of his/her service and need not necessarily wait till the end of employment and there is an option of break in the contribution in certain months when the expenses are expected to be higher.

So, let us use this opportunity and opt for Voluntary Provident Fund along with EPF contribution and enjoy the benefits to the maximum!

Popularity: 100%

Leave a Reply:

32 Responses to “VPF or Voluntary Provident Fund: Special benefits for employees”


I am working in Engineering college as an office incharge. Kindly give the details about deduction of VPF is for % basic or random basic

Mahendra SIngh | July 23rd, 2010 at 11:41 am

Its indeed what i was searching for

Actually salary figures of mine are close to what you have infered. But the problem is that when i ask my account manager here for VPF provisions he says as per the new PFguidlines i can not opt for VPF? so, is he true or just making me fool? can i forcefully ask for VPF againsty his insincere nod?

Your reply is highly waited, if you would wright me on


Let me know the Payment mode for the amount paid against Volunatry -PF as i want to Continue the savings . I used to pay the Amount by deducting from Salary in the Previous Company as there was an option to mpay . But There is no option for paying in the Present Company


Let me know whether an exempted employee from P.F is eligible to deduct V.P.F from his salary. if yes, what is the procedure.

commenter company doesnt have provision to automatically contribute to VPF even if I give instruction to them to deduct 12% of basic towards VPF…how can I still contribute towards VPF, i.e., add VPF amount to the existing PF account number of mine?

can you please advise how to withdraw VPF i have sizable amount accumulated in my VPF account and also after withdrawing it can i again opt in pls let me know the entire procedure


Good info abt VPF.


sir, i am by mistakenly typed the 100% contribustion instead of 10%. wheather can i change the percentage to 10%. is possible.


Your manager is making a fool of u… U can invest 100% of ur basic to VPF.


how add V.P.F amount to annual return of Soft copy


i am working in mnc how i want to close my vpf account pls replay me with procuder


hi. how much is the % of VPF as per the new PF norms? will you help me.?


DCIBlog_Live | May 27th, 2011 at 1:11 pm

Please find the reply for all your comments:

Voluntary Provident Fund (VPF)
VPF is applicable for employees who are covered under the Employee’s Provident Fund.

How can employee opt for VPF?
* Any employee can opt for VPF by mentioning the details like what is the percentage he/she wants to opt on his/her Basic+DA+Food Allowance and give the same in writing to the employer.
After that the mentioned percentage of amount on Basic+DA+Food Allowance will be contributed towards VPF.
* His/Her contribution will continue till he/she will be in service.
*From the Employer Side: Employer can add this VPF amount also along with EPF amount under contribution recovered from Employee while mentioning Form – 12A or can have two separate columns one for EPF and other for VPF. The same thing in PF Challan can be mentioned separate box given under Employee’s Provident Fund which says VPF.
* In yearly returns we can mention under a column called “RATE OF HIGHER VOLUNTARY CONTIRBUTION (If Any)” in Form 6A and same kind of column can be added in Form 3A also this will help to have more clarity.
* When it comes to mentioning in the Withdrawal form i.e particularly in Form-19 we need to mention the total amount of employee contribution which would include both EPF and VPF.

Note: There is no limit on the percentage that one can choose to opt. And Admin/EDLI Charges are applicable only on the total wages and thus it will not make employer to pay extra charges.


does in any organization vpf fascility available?


Dear Sirs,

What is the procedure to apply the volunteer PF????????
Kindly help in this regard.

i have 2lacks in my pf fund and i m leaving job for higher education? how much tax will i have to pay….


VPF vs PPF – Which is bet­ter? Many of us have this ques­tion and want to know which is bet­ter as an invest­ment option, VPF (Vol­un­tary Prov­i­dent Fund) or Pub­lic Prov­i­dent Fund. As the name sug­gests both the prod­ucts – VPF and PPF are prov­i­dent fund schemes. Let’s under­stand the two schemes in detail.


if one person is changing his job from one company to another company what happens to vpf and is there any locking period and what is the procedure to close it


Is all organization maintain VPF ? So that fund will not be affected during job changes

Is there any rule that the amount added/removed to VPF can be done only at the beginning of the financial year?


can you please let me know the interest rate on the VPF is Compound or Simple


Please send the VPF Format since i need to start vpf contribution .


Is there any admin charge that has to be borne by the employee towards the VPF account?


I am paying 24% of my salary to VPF apart from PF which is 12%, where as my company is considering only 24%(PF+VPF) for IT purpose. Is there is any mandatory rule that PF+VPF max 24% is allowed. I saw in net that 100% VPF can be considered for IT. Please reply

Ashish Kumar Rathore | January 18th, 2012 at 12:17 pm

I also changed my contribution mostly each month. as per my need.


am i eligible for loan on my PF? As its been 3 and a half a yrs with a salary of 39000 per month. i am looking for a VPF from next month. i need a loan for 2 lakhs somewhere around October, 2012. pls suggest. do i need to apply for VPF or my PF will help me out.

i am working as an officer in a nationalized bank. can i contribute in vpf for tax rebate


As I heard that VPF is going to taxable income.

if yes than please give us details of same


Is VPF contribution on the basis of percentage contribution of basic OR ammount, as increment arrear will be effected. Please update.


I want to stop contributing my VPF, is there any procedure to stop???

Atma ram mishra | March 3rd, 2013 at 9:55 am

I think vpf is a good and safe opetion for investment.
But i want to know two more question,s
1. How do i can make it,s possible ?
2. Can i withdrawn the vpf amt. In medway of my continued service in what percentage of my vpf.?
Pls. Guide me . .


Hello sir,

Can you eloborate little on this below pooint?

Employees also get a major tax break on their entire contribution to the fund (tax rebate under section 88 ) up to a ceiling of Rs. 70,000/-

My PF + VPF is aroun 15k per month. I am not saving on LIC etc.. is that good choice or bad choice?


Leave a Reply:

Name (required):
Email Address (required, not published) :
Website :
Comment (required):

Contact Us :

Dot Com Infoway, a CMMI Level 3 multinational information technology company, is a pioneer in delivering software development, mobile application and Internet marketing solutions and technologies to businesses. With offices in India, the United States and Netherlands, DCI is positioned to become a leader in delivering advanced IT services for your business.

For more information, email or visit our Contact Page.

Follow Us :

Dot Com Infoway

Tailored to meet international standards and client expectations, our methodology ensures proper risk management, seamless work flow and deadline-oriented development. It has built-in processes to monitor stringent adherence to quality, consistency in performance and accomplishment of project milestones. Our well-defined and flexible business model is a result of our deep industry intelligence and vast experience. Adhering to industry standards, our business model facilitates enterprises to get the best-of-breed solutions at affordable prices and top-notch quality.

Our privacy policy explains how we use and protect any information that you provide when you use our website. With high standards of security, we ensure that your valuable data is protected from misuse, loss or any external amendment.

Cookies for comments