EPF vs VPF Calculator

VPF (Voluntary Provident Fund) is an extension of EPF where you voluntarily contribute more than the mandatory 12% of basic salary. VPF earns the same interest rate as EPF (currently 8.25% for FY 2025-26). The key difference: EPF is mandatory at 12%, while VPF is voluntary up to 100% of basic salary. Both are government-backed and offer the same guaranteed returns.

VPF contributions up to Rs 2.5 lakh per year (combined employee EPF + VPF) earn tax-free interest. From Budget 2021, interest earned on employee PF contributions exceeding Rs 2.5 lakh per year is taxable at your income tax slab rate. This means if your basic salary is above Rs 2.08 lakh/month, even regular EPF (12%) crosses the Rs 2.5L limit. VPF contributions qualify for Section 80C deduction up to Rs 1.5 lakh.

Employer contributes 12% of basic salary, but it's split: 3.67% goes to your EPF account and 8.33% goes to EPS (Employee Pension Scheme). EPS contribution is capped at Rs 15,000 basic salary (max Rs 1,250/month to EPS). If your basic exceeds Rs 15,000, the excess employer contribution goes entirely to EPF. VPF has no employer matching — it's purely your voluntary extra contribution.

From April 2021, interest on employee PF contributions exceeding Rs 2.5 lakh per year is taxable. This applies to EPF + VPF combined employee contributions only (employer contribution is separate). For example, if you contribute Rs 4 lakh/year (EPF + VPF), interest on Rs 1.5 lakh (4L - 2.5L) is taxable at your slab rate. Government employees have a higher limit of Rs 5 lakh. Plan VPF contributions accordingly.

VPF follows the same withdrawal rules as EPF. You can make partial withdrawals for specific purposes: home purchase (after 5 years), medical emergency, education, or marriage. Full withdrawal is allowed if unemployed for 2+ months or at retirement (58 years). VPF withdrawn after 5 years of continuous service is tax-free. If withdrawn before 5 years, the employer's contribution and interest become taxable.