VPF opt in and Opt out

Can employee opt for VPF or Left VPF as per their conveyance ?Any specific rule for opt in opt out?

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Basic rules for VPF:

  • Only salaried employees enrolled in the employees’ provident fund are eligible for voluntary provident fund schemes.

  • Employees in the unorganised sector or self-employed individuals are not eligible to contribute towards VPF.

  • Once an employee chooses VPF, he cannot withdraw or opt-out in the middle of a year.

  • The accrued interests on the balance as well as the maturity amount are free from wealth taxes.

  • There is no maximum limit for the contribution. An employee is free to contribute as much as 100% of his salary. However, the employer might choose to adhere to the mandated amount.

  • There is a lock-in period of 5 years, during which the amount cannot be withdrawn. If, due to any circumstance, the amount is withdrawn, the employee is obliged to pay tax on the interest amount earned on his contribution towards VPF.

  • One can withdraw from accumulated savings of VPF contributions if he or she is unemployed for more than two months or when they retire.