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    What is Voluntary Provident Fund?

    Synopsis

    You should not ignore the fact that VPF comes with withdrawal restrictions and full withdrawal is possible only at the time of retirement.

    vpf-11Getty Images
    VPF is also available for deduction and therefore, can be a good tax planning tool.
    1. VPF is the voluntary contribution by employees towards the provident fund account over and above the 12 per cent contribution towards EPF.

    2. The maximum contribution allowed under VPF is up to 100 per cent of the basic salary and dearness allowance.

    3. The VPF gives the same interest as the EPF which is revised annually.

    4. Unlike for EPF, the employers are under no obligation to contribute to their employees’ VPF portfolio.

    5. VPF contribution is also eligible for deduction under Section 80C.

    (The content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)
    ( Originally published on May 13, 2019 )
    (Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

    (Your legal guide on estate planning, inheritance, will and more.)

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    (Your legal guide on estate planning, inheritance, will and more.)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    ...more
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