What is a Voluntary Provident Fund, and Why Are Salaried Employees Investing More in It?

Many salaried employees rely only on EPF for retirement savings without realising they can voluntarily invest more through VPF. With government-backed returns and tax benefits, VPF has become a popular long-term savings option in India. In this blog, learn everything about Voluntary Provident Fund (VPF).

What is a Voluntary Provident Fund (VPF)?

The Voluntary Provident Fund (VPF) is an optional retirement savings scheme that allows salaried employees to contribute more money to their Employee Provident Fund (EPF) account beyond the mandatory EPF contribution.

• Under EPF, employees usually contribute 12% of their basic salary and dearness allowance. 
• With VPF, employees can voluntarily increase this contribution and invest up to 100% of their basic salary and dearness allowance in their provident fund account.
• The VPF contribution earns the same interest rate as EPF, which is currently around 8.25% for FY 2025-26. 
• The scheme is backed by the Government of India, making it one of the safer long-term savings options for salaried individuals.

Also, check how to do financial planning for salaried employees.

VPN in India

Information	Details
VPF full form	The VPF full form is Voluntary Provident Fund.
VPF interest rate	The current VPF interest rate is 8.25% for FY 2025-26, the same as the EPF interest rate.
VPF contribution limit	Employees can contribute up to 100% of their basic salary and dearness allowance under VPF.
VPF maximum limit	The VPF maximum contribution can go up to 100% of the employee’s basic salary and dearness allowance.
VPF withdrawal rules	VPF withdrawals after five years of continuous service are generally tax-free, while early withdrawals may attract tax.
Is VPF taxable	VPF may become taxable if annual employee EPF and VPF contributions exceed the prescribed threshold or if withdrawals happen before eligible conditions are met.
VPF tax benefits	VPF offers tax deduction benefits under Section 80C subject to applicable limits under the old tax regime.
VPF tax exemption	Eligible VPF contributions, interest, and maturity amounts may qualify for tax exemptions under prevailing income tax rules.
Is VPF tax-free	VPF can be tax-free if contribution and withdrawal conditions under EPF tax rules are satisfied.

Voluntary Provident Fund (VPF) Rules in India

The rules related to the Voluntary Provident Fund (VPF) decide how salaried employees can contribute, withdraw funds, claim tax benefits, and transfer their provident fund balance.

Explore top tax saving options in 2026!

VPF Eligibility

Voluntary Provident Fund (VPF) eligibility is exclusive to salaried employees already contributing to the Employees’ Provident Fund (EPF).

VPF Contribution and Enrollment Rules

• Employees Can Contribute More Than Mandatory EPF
  Under VPF, employees can voluntarily contribute up to 100% of their basic salary and dearness allowance towards their provident fund account.

• Employer Does Not Match Extra Contribution
  The employer is only required to contribute towards the mandatory EPF portion. Any additional VPF contribution is made only by the employee.

• Contribution Changes Usually Happen at the Start of the Financial Year
  Most employers allow employees to revise or opt for VPF contributions at the beginning of a financial year based on payroll policies.

• VPF Uses the Same EPF Account
  VPF is not a separate investment account. The contribution gets added directly to the employee’s existing EPF account linked through the Universal Account Number (UAN).

VPF Tax Benefits

• Tax Deduction Under Section 80C
  VPF contributions qualify for a tax deduction under Section 80C up to the applicable annual limit under the old tax regime.

• Interest Above the Prescribed Threshold May Become Taxable
  If the combined employee contribution towards EPF and VPF exceeds the prescribed annual threshold, the interest earned on the excess contribution becomes taxable according to applicable income tax rules.

• Long-Term Tax Benefits
  VPF is generally considered a tax-efficient retirement savings option because eligible contributions, interest, and maturity amounts may qualify for tax benefits subject to prevailing tax laws.

VPF Withdrawal Rules 

• Five-Year Rule for Tax-Free Withdrawal
  Withdrawals made after completing five years of continuous service are generally tax-free under applicable EPF rules.

• Early Withdrawal May Attract Tax
  If funds are withdrawn before completing five continuous years of service, the withdrawn amount and interest may become taxable.

• Partial Withdrawals Are Allowed for Specific Needs
  Employees may apply for partial withdrawals or advances for approved purposes such as:

• Medical emergencies
• Marriage expenses
• Higher education
• Home purchase or construction
• Home loan repayment

VPF Job Change and Transfer Rules

• VPF Balance Can Be Transferred During Job Switches
  Employees do not need to close their VPF contribution account while changing jobs. The accumulated balance can continue through the same UAN-linked EPF account.

• UAN Helps Maintain Continuity
  The Universal Account Number (UAN) allows employees to transfer EPF and VPF balances smoothly between employers.

How to Open a Voluntary Provident Fund (VPF) Account

You do not need to open a separate account for a Voluntary Provident Fund (VPF). VPF works through your existing Employee Provident Fund (EPF) account.

• Contact Your Employer
  Reach out to your company’s HR, payroll, or finance department and inform them that you want to start Voluntary Provident Fund (VPF) contributions.

Many companies usually accept VPF requests at the beginning of the financial year or during the annual tax declaration period.

• Fill the VPF Request Form
  Your employer may provide an internal VPF declaration or enrollment form.

In the form, you need to mention:

• The percentage of salary you want to contribute, or
• The fixed monthly amount you want deducted towards VPF

The contribution is deducted from your basic salary and dearness allowance.

• Submit the Form to Payroll or HR
  After filling in the details, submit the signed form to your payroll or HR department for processing.

The request is then linked to your existing Universal Account Number (UAN) and EPF account.

• Salary Deductions Begin Automatically
  Once approved, the additional VPF contribution starts getting deducted automatically from your monthly salary along with the regular EPF deduction.

• Track Your VPF Balance
  You can check your EPF and VPF contributions through:
  – Salary slips
  – EPFO passbook
  – EPFO Member Portal

How to Check VPF Balance

Since the Voluntary Provident Fund (VPF) is linked directly to your Employee Provident Fund (EPF) account, you can check your VPF balance through the same EPF platforms and services.

1. Check VPF Balance Through EPFO Passbook Portal
This is one of the easiest ways to view your detailed EPF and VPF contributions separately.

• Visit the EPFO Member Passbook Portal
• Log in using your Universal Account Number (UAN), password, and captcha
• Verify with the OTP sent to your registered mobile number
• Select your Member ID
• Open the passbook to check your employee contribution details

Your VPF contribution usually appears under the employee share section along with the regular EPF contribution.

2. Check VPF Balance Through UMANG App
Employees can also track their provident fund balance through the government’s UMANG mobile application.

• Download the UMANG App
• Open EPFO services under Employee-Centric Services
• Select View Passbook
• Enter your UAN and OTP
• View or download the passbook statement

3. Check VPF Balance Through SMS
EPFO also provides balance details through SMS services.

Send this message from your registered mobile number:

EPFOHO UAN

Send it to:
7738299899

To receive the message in a regional language, add the first three letters of the preferred language at the end.

Example:
EPFOHO UAN HIN

4. Check VPF Balance Through Missed Call
Employees can also get their PF balance instantly through a missed call service.

• Give a missed call to 9966044425 from your registered mobile number
• The call disconnects automatically
• You receive an SMS with your provident fund balance details

• How to check the VPF balance?
  You can check your VPF balance through the EPFO portal, UMANG app, SMS service, or missed call facility because VPF contributions are linked directly to your EPF account.

EPF vs PPF vs VPF vs NPS in 2026

EPF, VPF, and PPF act as ultra-safe havens by investing in stable government and corporate bonds for guaranteed returns, while NPS serves as a growth engine that targets higher wealth through market-linked equity exposure.

Basis	EPF	PPF	VPF	NPS
Full Form	Employees’ Provident Fund	Public Provident Fund	Voluntary Provident Fund	National Pension System
Who Can Invest	Salaried employees in eligible organisations	Any Indian citizen	Salaried employees with EPF account	Indian citizens aged 18 to 70
Contribution Type	Mandatory for eligible employees	Voluntary	Voluntary additional PF contribution	Voluntary retirement investment
Employer Contribution	Yes, employer contributes	No	No extra employer contribution on voluntary amount	Employer contribution possible in corporate NPS
Current Interest / Returns (May 2026)	8.25%	7.1%	8.25%	Around 9% to 12% market-linked returns
Tax Benefits	Section 80C benefits available	Section 80C benefits available	Section 80C benefits available	Section 80C + additional ₹50,000 deduction under Section 80CCD(1B)
Tax on Maturity	Generally tax-free after eligible conditions	Fully tax-free	Generally tax-free after eligible conditions	Partial maturity amount taxable under current rules
Lock-In Period	Till retirement or eligible withdrawal	15 years	Similar to EPF rules	Till retirement age
Partial Withdrawal	Allowed under EPF rules	Allowed after a specified period	Allowed under EPF rules	Partial withdrawals allowed under NPS rules
Liquidity	Moderate	Low	Moderate	Lower liquidity compared to PF schemes
Suitable For	Salaried employees building retirement corpus	Conservative long-term investors	Salaried employees wanting higher PF savings	Investors seeking higher retirement growth through market exposure

If you are comparing retirement investment options beyond VPF, read our guide on what is annuity in NPS to understand how NPS retirement income works in India.

Which Option is Better?

• EPF works as a retirement foundation for salaried employees because both employee and employer contribute regularly.
• PPF is suitable for conservative investors who want government-backed long-term savings without employer dependency.
• VPF is useful for salaried employees looking to increase retirement savings with the same EPF interest rate and lower investment risk.
• NPS is suitable for individuals comfortable with market-linked investments and looking for potentially higher long-term retirement growth.

Disclaimer– The rankings and figures in this article have been compiled from multiple verified reports, credible news sources, and public financial data available as of 2026.

All values are approximate and may vary with newer updates, revisions, or changes in official records.

Voluntary Provident Fund (VPF) – FAQs