Introducing VPF in our Organisation

Hi All,
We are planning to introduce VPF in our company.

What is the procedure to register for our establishment.

Please advice.

Thank you.


Hi Ramesh,

There is no procedure to follow as such as per PF authority. For internal purpose you can send mail regarding VPF introduction and attached VPF employee declaration where employee can mentioned their amount or percentage of VPF to be deducted.

You can add one important point in the declaration that once VPF started then in between the year they can stop else employee will keep requesting to contribute for 3 moths or 6 months and this will go on. Just to maintain one proper rule you can add this.

I hope your query answered.


Hi @Ramesh

Welcome to our community!

There are no separate registration required for this as you should have already been registered under EPFO.

This a scheme being introduced for employees to save tax via PF so an internal policy and a circular should do good.

and as @Arpana said some important conditions like term / rules and regulations needs to be made aware.


Rules of VPF

  • Once you have opted for VPF, you cannot discontinue the investment mid-year.
  • Before opting for VPF, it’s important to know that if you withdraw money within the first 5 years of service, then the interest becomes taxable.
  • The responsibility of getting the VPF enrollment falls on the employee who must request their employer.
  • Most employers would like their employees to start their VPF at the start of the financial year.
  • VPF is available only to salaried individuals.
  • The risk of interest rates falling are higher with this investment as the interest rates are subject to change every year.
  • If Direct Tax Code comes into effect, then the entire maturity value will be taxable.

How to enrol in VPF?

  • Only salaried employees enrolled in the EPF are eligible to register for the VPF scheme.
  • If the company offers VPF option, the employee can opt for this during any point in the financial year.
  • The application form for VPF needs to be duly signed, filled & submitted to the accounts/finance/payroll of your company.
  • You can also request your employer to increase your contribution towards VPF by writing in request, asking for additional deduction from salary.

How to invest in VPF

Applying for Voluntary Provident Fund is extremely simple. And an employee can contribute a maximum of 100% of the Basic Salary and Dearness Allowance. The process requires the employee to write to the employer or concerned HR person requesting them to increase the PF contribution by the amount they desire. This option is available at any point of time during the financial year, unless the employer has specified their own requirements. A VPF Form will need to be filled and signed and then submitted to the accounts department or the concerned person in your company. The VPF Form only requires details such as the amount you would like to contribute from your basic salary and your dearness allowance.


Benefits of investing in VPF

  • You can contribute a maximum of 100% of basic salary and dearness allowance which is more than the conventional PF (Provident Fund) contribution of 12% of one’s basic salary.
  • VPF Interest rate is equal to that of the PF, and currently is 8.5%.
  • Withdrawals after the 5-year lock-in period are completely tax-free.
  • There is income tax exemption at all stages -contribution, investment, accumulation and returns and also at the time of withdrawal.
  • Employees can access the VPF money for reasons like marriage, house purchase, children’s education, etc.
  • The contribution to VPF is optional but if the subscriber chooses to make a contribution, he/she will be required to continue the contribution throughout the financial year -just a measure of convenience for one’s employer. There is no mandatory savings limit.