- 8.25%VPF interest, FY 2025-26
- 100%Most of basic + DA, with the 12%
- ₹0Added by the employer
- ₹2.5 LOwn PF a year with tax-free interest
What is VPF (Voluntary Provident Fund)?
VPF means Voluntary Provident Fund. It is extra money that a salaried employee chooses to put into their own EPF account. The compulsory EPF share is 12% of basic pay and dearness allowance (DA). With VPF, you pay more than that, by your own choice.
VPF is not a separate account. The money goes into your normal EPF account, under the same UAN (Universal Account Number). It earns the same interest and follows the same withdrawal rules as the rest of your PF. Your employer cuts it from your salary each month and sends it to EPFO with your normal PF.
- Step 1Tell your employerAsk HR or payroll for a VPF amount or percentage.
- Step 2Cut from salaryEach month, on top of your 12% EPF share.
- Step 3Earns the EPF rate8.25% for FY 2025-26, added once a year.
- Step 4Paid with your PFUnder the same EPF withdrawal rules.
Example: Rohan, 30. His basic pay + DA is ₹50,000 a month, so ₹6,000 already goes to EPF as his 12% share. He asks HR to add ₹5,000 a month as VPF. At 8.25% interest, after 15 years the VPF part of his PF account alone has grown to:
- VPF a month
- ₹5,000
- Put in over 15 years
- ₹9,00,000
- VPF value after 15 years
- ₹17,35,410
VPF interest rate 2026: 8.25%
The VPF rate of interest is always the same as the EPF rate. There is no separate VPF rate. EPFO's Central Board of Trustees recommends the rate once a year, and the government notifies it. For FY 2025-26 it is 8.25%.
- Interest is worked out every month on your balance at the end of the month.
- The total for the year is added to your account once, after the financial year ends.
- Next year, you earn interest on that interest too.
- The rate is fixed for a full year, but it can change from one year to the next.
| Financial year | EPF and VPF rate |
|---|---|
| From FY 2023-24 | 8.25% |
| FY 2022-23 | 8.15% |
| FY 2021-22 | 8.1% |
| FY 2020-21 | 8.5% |
See every past rate on the EPF interest rate page.
How much does VPF grow?
Value of the VPF part alone, at 8.25% a year, with the same amount every month. These figures do not include your 12% share or the employer's share.
| VPF a month | After 10 years | After 15 years | After 20 years |
|---|---|---|---|
| ₹2,000 | ₹3,67,555 | ₹6,94,164 | ₹11,79,640 |
| ₹5,000 | ₹9,18,887 | ₹17,35,410 | ₹29,49,099 |
| ₹10,000 | ₹18,37,775 | ₹34,70,819 | ₹58,98,198 |
The rate is assumed to stay at 8.25% for every year. In real life it may go up or down. To see your full PF balance with the 12%, the employer's share, VPF and pay rises, use the EPF calculator and enter a VPF percentage.
VPF contribution limit and rules
- Your own total, the 12% plus VPF, can go up to 100% of basic pay + DA. So VPF alone can be up to 88% of basic + DA.
- There is no fixed rupee limit, and no minimum beyond what your employer's payroll accepts.
- You can choose a fixed amount or a percentage of basic + DA, as your employer allows.
- The employer adds nothing to VPF. It pays only its normal 12% share, split between EPF and EPS.
- VPF is cut from your salary. You cannot pay it in yourself, online or by cheque.
Highest monthly VPF at different salaries:
| Basic + DA a month | Your 12% EPF | Most VPF | Most in all |
|---|---|---|---|
| ₹25,000 | ₹3,000 | ₹22,000 | ₹25,000 |
| ₹50,000 | ₹6,000 | ₹44,000 | ₹50,000 |
| ₹1,00,000 | ₹12,000 | ₹88,000 | ₹1,00,000 |
Who can contribute to VPF: eligibility
- Yes: Salaried employees who are EPF members with a UAN
- Yes: Employees of firms covered by EPFO
- Yes: Employees of firms with their own exempted PF trust, if the trust allows it (ask HR)
- No: Self-employed people and business owners (PPF and NPS are open to them)
- No: Employees whose employer is not covered by EPF
- No: Anyone after leaving salaried work, as VPF comes only from salary
How to start, change or stop VPF
VPF works only through your employer. You cannot open, change or stop it on the EPFO portal yourself.
- Step 1Ask HR or payrollMany companies have a VPF option on the HR portal; others take a written request.
- Step 2Give the amountA fixed amount or a percentage of basic + DA, up to 88%.
- Step 3Check your payslipVPF shows as a separate deduction next to your PF.
- Step 4Check the passbookThe EPFO passbook shows the VPF credit with your own share.
- To change or stop VPF, send a new request to HR. Many employers allow it only at set times, often at the start of the financial year.
- When you join a new job, VPF does not start on its own. Ask the new employer to start it again.
- Keep your UAN, KYC (Aadhaar, PAN, bank) and nominee up to date. The same details apply to VPF.
Read about UAN, KYC, balance check and transfer on the Employees' Provident Fund page.
VPF withdrawal rules
VPF money is part of your own share in EPF. So the EPF withdrawal rules under the EPF Scheme, 2026 apply to it. There are no separate VPF withdrawal rules.
- You need 12 months of membership for any partial withdrawal.
- While you work, up to 75% of your PF balance can be taken for allowed needs (illness, education, marriage, housing and special situations). At least 25% must stay in.
- Claims up to ₹5,00,000 are settled automatically, usually in about three working days.
- The full balance, VPF included, is paid at retirement at 58.
For example, with a PF balance of ₹4,00,000 (VPF included), the most you can take out while working is ₹3,00,000.
If you lose your job, for a PF balance of ₹4,00,000:
All the details are in our guide on PF withdrawal rules 2026.
VPF tax benefit and tax on VPF interest
- ₹1.5 LDeduction with other itemsOld regime, Section 123 (earlier 80C)
- ₹2.5 LOwn PF a year with tax-free interest12% + VPF together
- ₹20,833Own PF a month at that limit12% + VPF together
- 5 yearsService for a tax-free final withdrawal
- Deduction: in the old tax regime, your 12% and VPF count under Section 123 (earlier 80C) of the Income-tax Act, 2025, up to ₹1,50,000 a year together with PPF, life insurance premium and other items. The new regime does not give this deduction.
- Interest: tax-free on your own contributions (12% plus VPF) up to ₹2,50,000 in a year. This rule is in Schedule II of the Income-tax Act, 2025 (earlier Sections 10(11) and 10(12) of the 1961 Act) and covers contributions from 1 April 2021. The limit is ₹5,00,000 only in a fund where the employer makes no contribution, which is not the case in normal EPF.
- Interest on the part above the limit is taxed every year at your slab rate, as income from other sources, in both tax regimes. EPFO keeps this part in a separate taxable account inside your PF.
- Withdrawal: the final withdrawal is tax-free after 5 years of continuous service, counting earlier jobs whose PF was transferred. Before that, it is taxable.
Example: Ananya, 38. Her basic pay + DA is ₹1,00,000 a month. With 12% EPF and ₹15,000 VPF, her own PF is ₹27,000 a month, or ₹3,24,000 a year. That is ₹74,000 above the ₹2,50,000 limit. Only the interest on that ₹74,000 is taxable; the rest stays tax-free.
- Own PF a year
- ₹3,24,000
- Above the limit
- ₹74,000
- Its interest for a full year
- ₹6,105
VPF: strengths and limits
- Yes: Earns the EPF rate, 8.25% for FY 2025-26
- Yes: Can go up to 100% of basic + DA, with no rupee limit
- Yes: Cut from salary each month, so saving happens on its own
- Yes: Interest tax-free on own PF up to ₹2.5 L a year
- No: Only for salaried EPF members
- No: The employer adds nothing to VPF
- No: Interest on own PF above ₹2.5 L a year is taxable
- No: The rate is set every year and can change
VPF vs PPF
| VPF | PPF | |
|---|---|---|
| Who can join | Salaried EPF members only | Any Indian resident |
| Interest now | 8.25%, set once a year | 7.1%, set every quarter |
| How much | Up to 88% of basic + DA a month | ₹500 to ₹1,50,000 a year |
| How you pay | Cut from salary by the employer | You deposit at a bank or post office |
| Lock-in | Until 58, with partial withdrawals | 15 years, with partial withdrawals from year 7 |
| Tax on interest | Taxable on own PF above ₹2.5 L a year | Fully tax-free |
| Deduction | Old regime, Section 123 (earlier 80C) | Old regime, Section 123 (earlier 80C) |
The same ₹5,000 a month (₹60,000 a year) for 15 years, at today's rates:
| Put in | Value | Interest | |
|---|---|---|---|
| VPF at 8.25% | ₹9,00,000 | ₹17,35,410 | ₹8,35,410 |
| PPF at 7.1% | ₹9,00,000 | ₹16,27,284 | ₹7,27,284 |
VPF is paid in every month. The PPF figure assumes the full ₹60,000 is deposited by 5 April each year. Both rates can change in future years. Read more on the PPF page.
Frequently asked questions
What is VPF?
VPF means Voluntary Provident Fund. It is extra money you choose to put into your own EPF account from your salary, on top of the compulsory 12%. It goes into the same account, under the same UAN, and earns the same interest as EPF.
What is the VPF interest rate for 2026?
8.25% a year for FY 2025-26. VPF has no separate rate: it always earns the EPF rate, which EPFO's Central Board of Trustees recommends and the government notifies once a year.
How much can I contribute to VPF?
Your own total (the 12% plus VPF) can go up to 100% of your basic pay and DA. So VPF alone can be up to 88% of basic + DA. There is no fixed rupee limit.
Does the employer contribute to VPF?
No. The employer pays only its normal share to EPF and EPS. Nothing extra is added for your VPF.
How do I start VPF?
Ask your employer's HR or payroll team. Give a written or online request with the VPF amount or percentage of basic + DA. The employer then cuts it from your salary and sends it to EPFO with your normal PF. You cannot start VPF yourself on the EPFO portal.
Can I stop or change VPF?
Yes, through your employer. Many employers allow a change only at set times, often at the start of the financial year. Ask HR about your company's rule.
Is VPF interest taxable?
Interest is tax-free on your own PF contributions (12% plus VPF) up to ₹2,50,000 a year. Interest on the part above it is taxed every year at your slab rate. The limit is ₹5,00,000 only in a fund where the employer makes no contribution.
Is VPF covered under Section 123 (80C)?
Yes, in the old tax regime. Your 12% and VPF count under Section 123 (earlier 80C), up to ₹1,50,000 a year together with other tax-saving items. The new regime does not give this deduction.
Can I withdraw VPF money?
Yes, under the same rules as EPF, because VPF is part of your PF balance. After 12 months of membership, you can take up to 75% of the balance for allowed needs. The full balance is paid at retirement or after you stop working.
Is VPF better than PPF?
They suit different people. VPF earns the EPF rate (8.25% now) and is only for salaried EPF members. PPF earns 7.1%, is open to any resident, and has a limit of ₹1,50,000 a year. The comparison table on this page shows the main differences.
What happens to VPF when I change jobs?
VPF stays in your EPF account under the same UAN and moves with it to the new employer. To continue VPF in the new job, ask the new employer to start it again.