A Voluntary Provident Fund (VPF), an extension of the EPF (Employee Provident Fund), allows employees to make voluntary contributions to their provident fund account. This contribution does not include the 12% contribution to the Employee Provident Fund. The Voluntary Provident Fund, also known as the Voluntary Retirement Scheme, is overseen by the Government of India. Voluntary Provident Fund permits an employee to make a maximum contribution of up to 100% of their basic salary and Dearness Allowance. The interest rates of both VPF and EPF are the same.

1. Voluntary
Provident
Fund
CRAFTED BY PENSIONBOX

2. Voluntary Provident
Fund
A Voluntary Provident Fund (VPF), an extension of the EPF (Employee
Provident Fund), allows employees to make voluntary contributions
to their provident fund account. This contribution does not include
the 12% contribution to the Employee Provident Fund. The Voluntary
Provident Fund, also known as the Voluntary Retirement Scheme, is
overseen by the Government of India. Voluntary Provident Fund
permits an employee to make a maximum contribution of up to 100%
of their basic salary and Dearness Allowance. The interest rates of
both VPF and EPF are the same.

3. The basic characteristics of VPF
are:
The Voluntary Provident Fund is a supplement to the Employee Provident Fund.
It is not compulsory to contribute to the Voluntary Provident Fund.
It can continue to function until an employee retires or resigns.
The maturity amount for the Voluntary Provident Fund is determined by the amount
invested, which is determined by the employee's discretion.
The government of India determines the interest rate for the Voluntary Provident
Fund.
It has a 5-year lock-in period, which means that once you contribute to the
Voluntary Provident Fund, you cannot withdraw before the 5-year term is through.

4. Advantages of VPF
Employees can benefit from a contribution exemption, a principal
exemption, and an interest exemption through the Voluntary Provident
Fund. This qualifies the Voluntary Provident Fund as a tax-saving
strategy.
VPF is risk-free and secure when compared to other long-term
investment programmes offered by private enterprises since it is
maintained by the government.

5. VPF offers a significantly higher rate of interest when compared to other
investment options offered by private enterprises. The current VPF
interest rate is 8.51 percent this year.
The procedure for opening a Voluntary Provident Fund account is very
simple. To open a Voluntary Provident Fund account, employees must
speak with their financial department or HR manager. Fill up the
documentation as required.

6. VPF offers a significantly higher rate of interest when compared to other
investment options offered by private enterprises. The current VPF interest rate
is 8.51 percent this year.
If a worker changes jobs or relocates themselves, their Voluntary Provident
Fund can be easily moved from the previous firm to the new one.
If a worker changes jobs or relocates themselves, their Voluntary Provident
Fund can be easily moved from the previous firm to the new one.

7. Tax Exemption in VPF
The tax exemption provided by the Voluntary Provident Fund is its most distinguishing
feature. Tax benefits of up to Rs. 1.5 lakh are available to employees. Furthermore, the interest
earned from contributions to the Voluntary Provident Fund is tax deductible. However, If the
annual interest rate exceeds 9.50 percent, the case will be different.

8. Interest rates in VPF
The interest rate under the Voluntary Provident Fund is set by the Government of India and is
changed annually. The Voluntary Provident Fund has an annual interest rate of 8.50 percent
for the fiscal year 2019-2020. The previous rate of interest was 8.65 percent. Provident Fund
has consistently maintained a greater interest rate than the EPF from fiscal years 2013-2014
to 2019-2020.

9. Withdrawal facilities in VPF
The Voluntary Provident Fund allows both full and partial withdrawals (in the form of a loan).
A tax is paid on the accrued maturity total if the withdrawal occurs before the minimum
term of 5 years. The ultimate maturity amount is paid after the employee resigns or retires.
In the event of the account holder's untimely death, their designated nominee receives the
accrued cash under VPF. Money can be withdrawn from the Voluntary Provident Fund at any
time. So, the Voluntary Provident Fund gives people a reliable way to get money when they
need it.

10. How can PensionBox help?
Salaried employees who have an active EPF account can put money in VPF. As the name
suggests, it is a voluntary contribution which is over and above the statutory EPF contribution.
PensionBox helps you to track how your funds allocated towards EPF and other funds are
performing. Through our app, you can easily track your retirement savings and figure out
how much you need to save to reach your dream retirement goal. Your true ONE-STOP
Solution!

11. About PensionBox
PensionBox is India's first digital pension platform, where every
individual can track, plan and invest to retire early or just RIGHT.
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45 or 60, at the beach or somewhere in the mountains or back to your
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12. Contact Details
Website : https://pensionbox.in/
Mobile no. : 8445450050
E-mail ID : blog@pensionbox.in