What is VPF contribution?
The EPF Scheme Para 29(2) allows an employee to contribute more than 12% of the EPF Wages. Any contribution over and above 12% of EPF Wages is being termed as VPF (Voluntary Provident Fund). EPF Wage shall be the wage on which employer is deducting PF on monthly basis and depositing the same with the Office of EPFO/Trust.
An employee can opt for a maximum of 88% of EPF Wages to be contributed as VPF. VPF is being credited and reflected in employee share, in the passbook, along with 12% of the amount deducted by the employer as statutory deduction. Only precondition to avail this benefit is that the employee must have been covered under The EPF Act and employer is deducting and depositing contributions with the Office of EPFO/Trust.
Contribution: Besides EPF, both in VPF and PPF the contribution is voluntary. Only salaried individuals can sign up for VPF whereas PPF is for both salaried and non salaried individuals. … An employee can contribute around 100% of basic pay and dearness allowance towards VPF account (part of EPF).
How can I contribute to VPF?
There is no convoluted process for the same. You need to connect to your HR to find out if there is a form or declaration (offline and online) to be filled up and provided. Once done than the employer will deduct the VPF and deposit the same long with the amount which is being statutorily deducted and contributed by him to the Office of EPFO/Trust.
Tax Benefits for VPF /Â Is VPF tax exempted?
Any contribution by an employee towards VPF is eligible for deduction under Chapter VI A Section 80 C of The Income Tax Act 1961. The Maximum limit of deduction under section 80C is INR1.50 lakh from Financial year 2014-15 / Assessment Year 2015-16. Before FY 2014-15 the limit was INR 1 Lakh.
Withdrawal of  VPF?
There are no separate provisions under The EPF Act governing the withdrawal of VPF. As we have discussed in our earlier blog that VPF is being credited and reflected in employee share, in the passbook, along with 12% of the amount deducted by the employer as statutory deduction. Primarily VPF is part of employee share. While doing the withdrawal employee has to opt for a purpose which allows the withdrawal of employee share. There are various parameters which govern the withdrawal from PF e.g. period of service, purpose for which withdrawal is needed etc. which will allow a member to do the withdrawal.
