June 24, 2024

The Staff’ Provident Fund (EPF) and Voluntary Provident Fund (VPF) are beneficial sources for salaried people aiming to construct a considerable retirement fund. They each supply enticing rates of interest on contributions, making them glorious selections for retirement planning. Regardless of their shared purpose, EPF and VPF have distinct options. Let’s discover the variations between them.

EPF vs VPF, What to Select

What’s EPF?

The EPF, managed by the Staff’ Provident Fund Organisation (EPFO), is a retirement fund for salaried people. Staff put in 12 % of their primary pay plus dearness allowance, and employers match this. From the employer’s share, 8.33 % goes to the Worker Pension Scheme (EPS), and the remaining 3.67 % goes into the worker’s EPF account.

What’s VPF?

VPF, or Voluntary Provident Fund, is like an extension of EPF. The distinctive factor about VPF is that staff can contribute greater than the usual 12 %, even as much as 100% of their primary pay and dearness allowance. Nevertheless, it’s vital to know that the employer doesn’t chip in any cash for VPF.

Main Variations Between EPF & VPF


After the 2021 Finances, it’s vital to know that if you happen to contribute greater than Rs 2.5 lakh to your EPF or VPF in a 12 months, the curiosity earned on the additional quantity might be taxed. To get pleasure from tax advantages on the curiosity, maintain your whole EPF and VPF contributions inside the Rs 2.5 lakh restrict. Additionally, remember that EPF contributions may be taxed if the rate of interest is above 9.5 % or in case your employer’s contribution exceeds Rs 7.5 lakh in a 12 months.


You should have an EPF account, however having a VPF account is your selection. Nevertheless, having a VPF account may also help you save extra for retirement if you happen to go for it.


Within the EPF, each the worker and the employer contribute. Nevertheless, within the VPF, solely the worker makes contributions.

Cap Restrict

EPF contributions are restricted to 12 %, however with VPF, you may contribute as a lot as 100% of your primary wage plus dearness allowance.

Additionally learn:

LIC Saral Pension Yojana: Full Particulars For Eligibility, Advantages, And A lot Extra

Which Affords Highest Curiosity Fee: EPF vs VPF?

EPF and VPF each supply an rate of interest of 8.15 % in your contributions. Nevertheless, VPF can doubtlessly present higher returns as a result of you may contribute extra in comparison with the restricted 12 % allowed in EPF.