How Much of My Basic Salary Can I Contribute to VPF? Seeking Clarity on PF Act Limits

Suppose I get a gross salary of Rs. 10,000/- per month. My basic is Rs. 4,500/- per month. My PF contribution is Rs. 540/- per month, which is 12% of Rs. 4,500. The same employer will contribute to my PF account. What will be the limit of where I can deposit my VPF? Can I go up to 100% of my basic salary? Please provide a reference to the PF Act regarding this matter.

Regards, Vivek 9819387573

As per the Act, the member has to contribute at the rate of 10% or 12% of his basic pay, D.A., and retaining allowance if any. In case the member wants to contribute more than this, voluntarily he can do so at any rate he desires, i.e., up to 100% of basic and D.A. However, the employer is not bound to contribute at the enhanced rate. A joint declaration should be submitted to the Concerned RPFO.

Hi all,

Our company's senior manager is receiving a salary of Rs. 36,000, but he only pays PF contribution for Rs. 6,500 @ 12%, which is Rs. 780. Additionally, he pays an extra VPF of Rs. 6,000. Is this correct? Please respond promptly.

The PF department personnel mentioned that the individual should only pay Rs. 6,500, including VPF.

Thank you,
Maheswaran
Powergear

I am not clear about your actual query. As per the PF Act, the authority's purview is whether we are deducting PF contributions up to Rs. 6,500 or not. Anything over Rs. 6,500 is considered a voluntary contribution. For that, you need to obtain a Joint Declaration.

Regards,
S. Rajasekarn

Voluntary Provident Fund (VPF): VPF is a safe option wherein you can contribute more than the PF ceiling of 12% mandated by the government. This additional amount enjoys all the benefits of PF, except that the employer is not liable to contribute any extra amount apart from 12%. An added advantage is that the interest rate is equal to the interest rate of PF, and the withdrawal is tax-free. Please note that the maximum contribution towards VPF is 100% of your Basic.

Dear Sachin, one of our employees wants to deposit in VPF. Currently, he is contributing 12% of his full basic salary, which is Rs. 158,334.00, i.e., Rs. 19,000.00, and the employer's share is also Rs. 19,000.00. His total contribution is 24% of his basic salary into the PF account, with no EPS contribution as he has completed 58 years. Now, he wishes to deposit up to the maximum limit (100% of basic) in VPF.

Procedure for depositing in VPF

What is the procedure for depositing his contribution in VPF? Additionally, he is retired from EPS, so can he still deposit in VPF? Please assist me with this matter.

Thank you.