Bhartiya Akhil
Freelancer
Jangir86
Payroll Software, Pf, Esi Services
Srinath Sai Ram
Hr Manager

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Dear All, One of our employee wants to contribute VPF, As a company we will deduct his desired amount from his salary towards VPF.
But I have no idea about " How to declare this VPF contribution in Monthly ECR file?". Request you to please guide me on this.


Dear Mr Manoj, Please Clarify what is this VPF, Does this come under EPF? What is the EPF Wages? What is the % Contribution-Employee & Employer.Who has given permission for EPF?
From India, New Delhi
Yes, you can contribute VPF contribution. Fill up a related form and add this amount into PF

Dear Mr Jangir, can you Please let us know which is that Related Form.Please elaborate your reply for information of all of us
From India, New Delhi
Dear Manoj-U1,
VPF amount you have to add in the EPF EE share. There is no provision of showing VPF separately in ECR now.
However, you need to obtain and submit it to EPFO a consent from employee for deducting VPF from his salary.

From India, Mumbai
Dear Srinath Sai Ram,
VPF is Voluntary Provident Fund. Employee can contribute his share towards EPF more that 12% . This voluntary contribution can be maximum up to 100% of the salary. But you need to see the maximum permissible deduction under Payment of Wages Act.
In this case, employer contribution is 12% only.
Employee is entitled to interest on it at the same rate of EPF.

From India, Mumbai
Dear Mr Akhil,
Thanks for the information.Please let me know the Section under which Member can Contribute more than Present Rate-12% & can be up to Maximum 100% of the Salary
Present wage Ceiling:Rs15,000/- Present Contribution (@12%):Rs1,800/-
What is the Maximum Amount an Employee can Contribute, who is Drawing EPF Wages of Rs15,000/- is there any Form, Should we inform PF Department.Please give all details for information of all Members

From India, New Delhi
Dear Srinath Sai Ram,

You are requested to read Para 29(2) of the EPF Scheme which is reproduced verbatim as under for your easy reference:

Para 29(2)

The contribution payable by the employee under the Scheme, shall be equal to the contribution payable by the employer in respect of such employee:

Provided that in respect of any employee to whom the Scheme applies, the contribution payable by him may, if he so desires, be an amount exceeding [ten per cent] or [twelve per cent], as the case may be, of his basic wages, dearness allowance and retaining allowance (if any) subject to the condition that the employer shall not be under an obligation to pay any contribution over and above his contribution payable under the Act.

What does it mean that employee can contribute more than 10 /12 percent however, employer is not under obligation to pay over and above 10/ 12 percent payable under the Act.

The contribution by employee over and above is called as VPF.

There are very old circulars (prior to 1975) by EPFO on permissible maximum VPF contribution which are not available easily today and if at all the same are available with anyone, are not legible.

Common practise in VPF, we allow from 8% extra i.e. total 20% to 12% extra i.e. total 24%. However, there are some cases told to me that EPFO has allowed maximum 100% contribution i.e. 88% extra.

In this case the employer has to see the take home salary that is net in the hand of employee should not be lesser than what is prescribed under POW Act. Otherwise, that will be a violation of provisions under POW Act in respect to deductions.

From India, Mumbai
Dear Friends,
Further to my post # 5 above, I would like to add as under:
When the consent or joint option is not obtained or permission from APFC is not obtained and the EPFO updates its account on the basis of contribution received, then it is deemed that consent / Joint option or the permission is granted. (RC Gupta & ors. Vs RPFC in SLP No. 33032-33 of 2015).

From India, Mumbai
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