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What is Voluntary Provident Fund?

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

Last Updated: May 13, 2019, 06.30 AM IST
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VPF is also available for deduction and therefore, can be a good tax planning tool.
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1. VPF is the voluntary contribution by employees towards the provident fund account over and above the 12% contribution towards EPF.

2. The maximum contribution allowed under VPF is up to 100% 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.)
Click here for all the information and analysis you need for tax-saving this financial year
(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.)
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