How to Open a VPF account?

1. Basic of all the employee should be a salaried employee and should be working in an organization recognized by EPFO and should have an active EPF account.

2. First of all the employee working in an organisation should approach his HR/Admin officer about his willingness of opening a VPF account, and intimate the amount he would like to contribute in the VPF account. A form for opting for VPF is to be collected from HR/Admin officer sharing all the necessary details.

3. The VPF account can be created at any time during the year, however to maximize the returns it is suggested to open the account during the starting of financial year and once opted applicant can’t discontinue the VPF scheme during the financial year.

4. Maximum contribution under VPF scheme is 100% of basic salary + dearness allowance, and if applicant makes a withdrawal before 5 years, proceeds received from VPF account will be taxable.

5. In case the applicant wants to increase the amount of VPF in later years, he can intimate the same in writing stating his willingness to increase the contribution under VPF and the amount to his HR/ Admin officer.

6. Applicant can also check his balance of VPF anytime through EPFO website or mobile application through his UAN(Universal account number).

Voluntary Provident Fund (VPF) – Interest Rate, Benefits, Limit, Withdrawal Rules

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What is VPF?

Voluntary Provident Fund or VPF is defined as a voluntary scheme for investment made by salaried employees over and above the Employee Provident Fund (EPF) governed and supported by the Government of India. Under VPF, employees contribute a certain percentage of their share of salary to the PF account. Employee may direct their employer to deduct an extra amount of PF over and above EPF, VPF contribution is beyond the set standard contribution of 12% of EPF which is compulsory in nature to contribute for both employee and employer, whereas under VPF neither employee nor employer is under a statutory obligation to contribute....

Interest Rate on VPF

The current rate of interest on VPF is 8.1% and is decided by the Ministry of labour in consultation with the Ministry of Finance....

Benefits of Voluntary Provident Fund

1. Secure Mode of Investment: VPF as is backed up by the government of India is seen as a safe investment option and, it makes it a better option rather than other investment options available. Under VPF there is surety of getting the matured value along with interest and risk is barely involved....

Limit of VPF Investment

Under VPF, a maximum of 100% of Basic Salary + Dearness Allowance can be invested under VPF scheme and there is no minimum investment requirement in VPF scheme....

Documents Required For VPF Registration

Voluntary Provident Fund (VPF) registration is generally a part of your regular Provident Fund (PF) account, so you don’t need separate registration for VPF. When you join a new job or enroll in the EPF scheme, your employer will assist you with the PF and VPF registration process. However, here are the standard documents and information required for PF and VPF registration:...

How to Open a VPF account?

1. Basic of all the employee should be a salaried employee and should be working in an organization recognized by EPFO and should have an active EPF account....

How to Check VPF Balance Online?

To check your Voluntary Provident Fund (VPF) balance online, following steps can be followed:...

EPF vs VPF vs NPS

Basis EPF VPF NPS Full form Employee Provident Fund Voluntary Provident Fund National Pension System Who is Eligible Salaried employees who are working in EPFO recognized organization Salaried employees who have an active EPF account and are working in EPFO recognised organisations All citizens and non resident citizens who are between the age group of 18 years to 60 years. Required Contribution by Employer 12% of basic salary + dearness allowance No statutory obligation on employer Optional for Private employers. Required Contribution by Employee 12% of basic salary + dearness allowance As per the discretion of employee, up to 100% of basic salary + dearness allowance 10% of basic salary + dearness allowance Investment Tenure Till retirement or unemployment Not less than 5 years or retirement/ unemployment Till the age of 60. Partial Withdrawal Allowed only on certain conditions and subject to approval from EPFO. Allowed only on certain conditions and subject to approval from EPFO. Allowed for specific purpose only after three years of investment in the scheme Available Tax Benefits Categorized under EEE category i.e. Contribution, interest and maturity value are exempt up to certain limits and conditions Categorized under EEE category i.e. Contribution, interest and maturity value are exempt up to certain limits and conditions Categorized under EEE category. Tax deduction up to Rs.1.5 lakh under Section 80CCE and 80CCD(2) Loan Availability Allowed subject to approval from EPFO Allowed subject to approval from EPFO Not allowed...

Frequently Asked Questions (FAQs)

Ques 1. What is the eligibility criteria for enrolling in VPF?...