Dear All,
Please suggest me whether the employer can deduct the employee Contribution of PF more than 12% on basic salary (If employee wishes) ? And is the entire amount of PF will be exempted from Income Tax u/s 80C ?
And what about the employer contribution on the higher deduction ?
Thanks & Regards,

From India, Bengaluru

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Dear Rajendra,
You are right, you can contribute more than 12% (being compulsory contribution) EPF. The excess contribution is called VPF (Voluntary PF). You have to intimate the deduction to your HR (Payroll). The VPF is also exempted under section 80C.
There would be no contribution from the employer on the VPF. However, this is eligible for same Interest as declared for EPF. Generally the PF Interest is highest among similar kind of saving plan.
The VPF is a very good (can say the best) option for safe investment which give you Tax Exemption as well. In long period you will see it more attraction when the interest will increase with more pace (due to monthly cumulative method).
I have been contributing for VPF for last 7 years.

From India, Delhi

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