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.