{"id":8941,"date":"2025-04-18T18:21:22","date_gmt":"2025-04-18T18:21:22","guid":{"rendered":"https:\/\/www.caindelhiindia.com\/blog\/?p=8941"},"modified":"2026-01-10T18:25:20","modified_gmt":"2026-01-10T18:25:20","slug":"all-about-vpf-voluntary-provident-fund","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/all-about-vpf-voluntary-provident-fund\/","title":{"rendered":"All about VPF (Voluntary Provident Fund)"},"content":{"rendered":"<h2 data-start=\"150\" data-end=\"216\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-8940\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/03\/VPF-.jpg\" alt=\"VPF\" width=\"1028\" height=\"1494\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/03\/VPF-.jpg 335w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/03\/VPF--206x300.jpg 206w\" sizes=\"(max-width: 1028px) 100vw, 1028px\" \/><\/h2>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_58 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-69ea431c8b047\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69ea431c8b047\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caindelhiindia.com\/blog\/all-about-vpf-voluntary-provident-fund\/#Lesser-Known_Facts_About_VPF_Voluntary_Provident_Fund\" title=\"Lesser-Known Facts About VPF (Voluntary Provident Fund)\">Lesser-Known Facts About VPF (Voluntary Provident Fund)<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caindelhiindia.com\/blog\/all-about-vpf-voluntary-provident-fund\/#Key_Features_of_VPF\" title=\"Key Features of VPF:\u00a0\">Key Features of VPF:\u00a0<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caindelhiindia.com\/blog\/all-about-vpf-voluntary-provident-fund\/#Voluntary_Provident_Fund_VPF_%E2%80%93_Rules_Regulations\" title=\"Voluntary Provident Fund (VPF) \u2013 Rules &amp; Regulations\">Voluntary Provident Fund (VPF) \u2013 Rules &amp; Regulations<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caindelhiindia.com\/blog\/all-about-vpf-voluntary-provident-fund\/#What_is_the_difference_between_VPF_and_EPF\" title=\"What is the difference between VPF and EPF?\">What is the difference between VPF and EPF?<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caindelhiindia.com\/blog\/all-about-vpf-voluntary-provident-fund\/#EPFO_Applicability_under_the_Code_on_Social_Security_2020%E2%80%94Explained_Clearly\" title=\"EPFO Applicability under the Code on Social Security, 2020\u2014Explained Clearly\">EPFO Applicability under the Code on Social Security, 2020\u2014Explained Clearly<\/a><ul class='ez-toc-list-level-3'><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caindelhiindia.com\/blog\/all-about-vpf-voluntary-provident-fund\/#PF_Provident_Fund%E2%80%94Key_Concept_Under_the_New_Code\" title=\"PF (Provident Fund)\u2014Key Concept Under the New Code\">PF (Provident Fund)\u2014Key Concept Under the New Code<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 data-start=\"150\" data-end=\"216\"><span class=\"ez-toc-section\" id=\"Lesser-Known_Facts_About_VPF_Voluntary_Provident_Fund\"><\/span><span style=\"color: #000080;\"><strong data-start=\"157\" data-end=\"216\">Lesser-Known Facts About VPF (Voluntary Provident Fund)<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<h3 class=\"\" data-start=\"332\" data-end=\"362\"><span class=\"ez-toc-section\" id=\"Key_Features_of_VPF\"><\/span><span style=\"color: #000080;\"><strong data-start=\"339\" data-end=\"362\">Key Features of VPF:\u00a0<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<ul>\n<li data-start=\"218\" data-end=\"272\">Extension of EPF, Not a Separate Scheme : Voluntary Provident Fund\u00a0is not a separate fund \u2014 it is an extension of the Employee Provident Fund (EPF). Only salaried employees contributing to EPF can opt for\u00a0Voluntary Provident Fund. Contributing to a VPF account is not mandatory; it&#8217;s entirely at the discretion of the employee. Unlike EPF, employees can contribute up to 100% of their Basic Salary + Dearness Allowance to the VPF account.<\/li>\n<li class=\"\" data-start=\"653\" data-end=\"862\">\n<p class=\"\" data-start=\"656\" data-end=\"862\">Government-Declared Interest Rate: The Government of India revises the VPF interest rate at the beginning of each financial year. It may increase or decrease based on macroeconomic factors.<\/p>\n<\/li>\n<li class=\"\" data-start=\"1025\" data-end=\"1190\">\n<p class=\"\" data-start=\"1028\" data-end=\"1190\">Transferable Between Employers: VPF balances can be transferred from a previous employer to the current employer, ensuring continuity of the account.<\/p>\n<\/li>\n<li data-start=\"1232\" data-end=\"1286\">Full Withdrawal at Maturity: The total accumulated amount (contributions + interest) can be withdrawn at the time of resignation or retirement.<\/li>\n<li class=\"\" data-start=\"1025\" data-end=\"1190\">No Automatic Enrollment :\u00a0 You must request in writing to your employer to start VPF.\u00a0It can typically only be modified at the start of a financial year, depending on company policy.<\/li>\n<li class=\"\" data-start=\"1192\" data-end=\"1345\">\n<p class=\"\" data-start=\"1195\" data-end=\"1345\">Nominee Benefits: In the unfortunate event of the account holder\u2019s demise, the nominee\/legal heir receives the entire accumulated corpus.<\/p>\n<\/li>\n<li data-start=\"429\" data-end=\"469\">Visible in EPFO Passbook: VPF contributions and interest appear in your regular EPF passbook, making tracking easy.<\/li>\n<li class=\"\" data-start=\"1025\" data-end=\"1190\">\ud83c\uddee\ud83c\uddf3 Safe &amp; Government-Backed: Since\u00a0EPF\/VPF is managed by the EPFO under the Ministry of Labour, it is considered one of the safest investment options.<\/li>\n<li>Can Be Stopped or Changed (But Limited Window): Once\u00a0opted in, you may not be able to alter the VPF contribution mid-year, unless the employer\u2019s policy allows it.\u00a0Some companies lock the contribution amount for the year.<\/li>\n<\/ul>\n<h2 class=\"\" data-start=\"269\" data-end=\"330\"><span class=\"ez-toc-section\" id=\"Voluntary_Provident_Fund_VPF_%E2%80%93_Rules_Regulations\"><\/span><span style=\"color: #000080;\"><strong data-start=\"274\" data-end=\"330\">Voluntary Provident Fund (VPF) \u2013 Rules &amp; Regulations<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li data-start=\"1347\" data-end=\"1576\">Tax Benefits (EEE Regime): VPF\u00a0enjoys Exempt-Exempt-Exempt tax treatment: Contribution: Deductible under Section 80C (within INR 1.5 lakh limit). Interest: Tax-free (up to a limit, see below).\u00a0Maturity: Fully tax-free if criteria are met.<\/li>\n<li data-start=\"1232\" data-end=\"1286\">Tax on Interest for High-Income Earners: From FY 2021\u201322 onwards, if your annual employee contribution to EPF + VPF exceeds INR 2.5 lakh, interest earned on the excess is taxable.\u00a0 If there is no employer contribution (e.g., government employees with GPF), the threshold is INR 5 lakh.<\/li>\n<li>Account Opening Window: VPF accounts can be opened anytime during the financial year.<\/li>\n<li class=\"\" data-start=\"1025\" data-end=\"1190\">Lock-in Period and Withdrawal Rules : Partial withdrawals are allowed in the form of loans. Premature withdrawal may attract tax liability on the interest earne,\u00a0 VPF has a 5-year lock-in for tax-free withdrawal. Premature withdrawals are allowed for\u00a0 Marriage Medical emergencies House purchase\/construction Higher education, however, tax benefits may be reversed if withdrawn before 5 years. Once opted in, contributions to the VPF account cannot be discontinued for 5 years (to retain tax-free status).<\/li>\n<li data-start=\"429\" data-end=\"469\">Interest Rate Same as EPF : VPF earns the same interest rate as EPF, which is decided by the EPFO every year (8.15% for FY 2023\u201324). Returns are compounded annually, making it more attractive for long-term, risk-averse investors.<\/li>\n<li class=\"\" data-start=\"1347\" data-end=\"1576\">\n<p class=\"\" data-start=\"1350\" data-end=\"1375\">You can contribute up to 100% of Basic + DA : Only salaried employees covered under the Employees&#8217; Provident Fund Organisation (EPFO) are eligible. Individuals in the unorganised sector are not allowed to open a VPF account. You can contribute up to 100% of your basic salary and Dearness Allowance voluntarily (beyond the mandatory 12%). However, your employer is not obligated to match the extra contribution.<\/p>\n<\/li>\n<\/ul>\n<h3 class=\"\" data-start=\"806\" data-end=\"863\"><span class=\"ez-toc-section\" id=\"What_is_the_difference_between_VPF_and_EPF\"><\/span><span style=\"color: #000080;\"><strong data-start=\"816\" data-end=\"863\">What is the difference between VPF and EPF?<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<div class=\"group pointer-events-none relative flex justify-center *:pointer-events-auto\">\n<p>&nbsp;<\/p>\n<div class=\"tableContainer horzScrollShadows relative\">\n<table class=\"min-w-full\" style=\"height: 207px;\" width=\"949\" data-start=\"864\" data-end=\"1457\">\n<thead data-start=\"864\" data-end=\"961\">\n<tr data-start=\"864\" data-end=\"961\">\n<th data-start=\"864\" data-end=\"889\">Feature<\/th>\n<th data-start=\"889\" data-end=\"923\">EPF<\/th>\n<th data-start=\"923\" data-end=\"961\">VPF<\/th>\n<\/tr>\n<\/thead>\n<tbody data-start=\"1062\" data-end=\"1457\">\n<tr data-start=\"1062\" data-end=\"1160\">\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1062\" data-end=\"1087\">Contribution<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1087\" data-end=\"1121\">Mandatory 12% of Basic + DA<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1121\" data-end=\"1160\">Voluntary, up to 100% of Basic + DA<\/td>\n<\/tr>\n<tr data-start=\"1161\" data-end=\"1259\">\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1161\" data-end=\"1186\">Employer Contribution<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1186\" data-end=\"1220\">Mandatory<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1220\" data-end=\"1259\">Not applicable<\/td>\n<\/tr>\n<tr data-start=\"1260\" data-end=\"1358\">\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1260\" data-end=\"1285\">Flexibility<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1285\" data-end=\"1319\">Fixed statutory contribution<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1319\" data-end=\"1358\">Completely flexible (voluntary)<\/td>\n<\/tr>\n<tr data-start=\"1359\" data-end=\"1457\">\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1359\" data-end=\"1384\">Tax Benefits<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1384\" data-end=\"1418\">Under Section 80C (EEE status)<\/td>\n<td class=\"max-w-[calc(var(--thread-content-max-width)*2\/3)]\" data-start=\"1418\" data-end=\"1457\">Under Section 80C (EEE status)<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n<h2 data-start=\"216\" data-end=\"301\"><span class=\"ez-toc-section\" id=\"EPFO_Applicability_under_the_Code_on_Social_Security_2020%E2%80%94Explained_Clearly\"><\/span><span style=\"color: #000080;\"><strong data-start=\"219\" data-end=\"301\">EPFO Applicability under the Code on Social Security, 2020\u2014Explained Clearly<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone  wp-image-9904\" src=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/04\/PF.jpeg\" alt=\"PF (Provident Fund)\" width=\"1248\" height=\"2236\" srcset=\"https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/04\/PF.jpeg 893w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/04\/PF-167x300.jpeg 167w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/04\/PF-572x1024.jpeg 572w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/04\/PF-768x1376.jpeg 768w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/04\/PF-857x1536.jpeg 857w, https:\/\/www.caindelhiindia.com\/blog\/wp-content\/uploads\/2025\/04\/PF-800x1433.jpeg 800w\" sizes=\"(max-width: 1248px) 100vw, 1248px\" \/><\/p>\n<p data-start=\"303\" data-end=\"527\">PF compliance is not optional\u2014it\u2019s foundational. For HR and Payroll professionals, a correct understanding of wages, ceilings, and attendance-based calculations is critical to avoid errors, disputes, and penalties.\u00a0Below is a simple breakdown based on the new wage definition under the Code on Social Security, 2020<\/p>\n<h3 data-start=\"647\" data-end=\"708\"><span class=\"ez-toc-section\" id=\"PF_Provident_Fund%E2%80%94Key_Concept_Under_the_New_Code\"><\/span><span style=\"color: #000080;\"><strong data-start=\"652\" data-end=\"708\">PF (Provident Fund)\u2014Key Concept Under the New Code<\/strong><\/span><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p data-start=\"710\" data-end=\"866\">Rule: At least 50% of total remuneration must be treated as \u201cwages.\u201d Any allowance exceeding this limit is added back for PF calculation. Allowance-heavy salary structures will increase PF liability. PF contribution depends on earned wages, not just salary structure. Attendance directly impacts PF when wages fall below the ceiling. Accurate structuring today avoids future EPFO litigation. EPFO compliances require timely filing, accurate employee records, and adherence to due dates to avoid penalties.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Lesser-Known Facts About VPF (Voluntary Provident Fund) Key Features of VPF:\u00a0 Extension of EPF, Not a Separate Scheme : Voluntary Provident Fund\u00a0is not a separate fund \u2014 it is an extension of the Employee Provident Fund (EPF). Only salaried employees contributing to EPF can opt for\u00a0Voluntary Provident Fund. Contributing to a VPF account is not &hellip;<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[173],"tags":[1167],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8941"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=8941"}],"version-history":[{"count":5,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8941\/revisions"}],"predecessor-version":[{"id":9906,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/8941\/revisions\/9906"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=8941"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=8941"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=8941"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}