Estimate your Voluntary Provident Fund maturity amount, interest earned, the tax on interest above the Rs 2.5 lakh limit, and your Section 80C deduction. Free, no login.
This calculator shows what extra (voluntary) PF contributions grow to and when their interest turns taxable. Formula: each month's opening EPF + VPF balance earns 8.25% ÷ 12, credited every 31 March. If your own EPF + VPF contribution in a year is above Rs 2.5 lakh, interest on the excess is taxed at your slab, with 10% TDS.
Sample values shown (Basic + DA Rs 50,000, VPF 10%, 20 years, 5% salary growth). Change them to get your own number.
| Year | VPF Paid | Interest on VPF | VPF Balance | Taxable Interest (EPF + VPF) |
|---|
The Voluntary Provident Fund is not a separate scheme. It is simply the extra amount you ask your employer to deduct from your salary and deposit into your existing EPF account, over and above the mandatory 12% of basic pay plus dearness allowance. Because it sits inside EPF, it earns the same government declared interest rate, gets the same sovereign backing, and follows the same withdrawal rules. That combination of guaranteed return and tax efficiency is why VPF is one of the most popular debt options for salaried employees in India.
| Rule | What applies |
|---|---|
| Who can contribute | Any salaried employee with an active EPF account with EPFO or an exempted PF trust. Not available to self employed people or those outside EPF. |
| Maximum contribution | Up to 100% of Basic + DA (that is, 12% mandatory EPF plus up to 88% VPF). No minimum. |
| Employer contribution | None. The employer's 12% (split between EPF and EPS) does not change when you opt for VPF. |
| Interest rate | Same as EPF. 8.25% p.a. for FY 2025-26, recommended by the Central Board of Trustees and approved by the government in June 2026. The FY 2026-27 rate is declared later. |
| Interest calculation | Monthly running balance, credited once a year on 31 March. |
| Section 80C | Employee EPF + VPF contributions qualify, within the overall Rs 1.5 lakh limit. Old tax regime only. |
| Tax on interest | Interest on employee contributions above Rs 2.5 lakh per year (EPF + VPF combined) is taxable. TDS at 10% by EPFO (20% without PAN). |
| Withdrawal | Same as EPF. Tax free after 5 years of continuous service. Before 5 years, TDS at 10% (20% without PAN) if the amount is Rs 50,000 or more. |
| How to opt in | Submit a VPF declaration to your HR or payroll team. Most employers accept changes at the start of a financial year or in fixed windows. |
EPFO does not compound interest monthly. It computes interest on the balance at the start of each month at one twelfth of the annual rate, adds the twelve monthly figures up, and credits the total to your account on 31 March. From the next financial year, that credited interest also starts earning interest, so compounding happens once a year. A contribution deposited in a month earns interest from the month that follows.
You contribute Rs 10,000 per month to VPF starting April at 8.25%. The monthly rate is 8.25 / 12 = 0.6875%. April's deposit earns nothing in April, Rs 68.75 in May (on Rs 10,000), the May deposit then makes June's opening balance Rs 20,000 and so on. Over the first year the interest works out to Rs 68.75 x (1 + 2 + ... + 11) = Rs 4,537.50 on Rs 1,20,000 contributed. Closing balance after the March credit: Rs 1,24,537.50. That balance earns a full 8.25% in year 2 on top of new contributions, which is where the growth starts to compound.
Many online calculators, including some large finance sites, use a monthly compounding annuity formula instead. That overstates the corpus slightly compared to how EPFO actually credits interest. This calculator follows the EPFO method.
Since 1 April 2021 (Finance Act 2021, carried into the Income Tax Act, 2025), interest on your own EPF plus VPF contributions above Rs 2.5 lakh in a financial year is taxable. The limit rises to Rs 5 lakh only for funds where the employer makes no contribution at all, such as the GPF for government employees. Under Rule 9D of the Income-tax Rules, 1962, EPFO keeps two notional accounts for you: a non taxable account (all balances up to 31 March 2021, plus every year's contribution up to Rs 2.5 lakh, plus their interest) and a taxable account (contributions above Rs 2.5 lakh and the interest they earn). The interest on the taxable account is added to your income under "income from other sources" each year, and EPFO deducts TDS at 10% under Section 194A when it credits that interest, or 20% if your PAN is not linked.
At the 8.25% rate, Rs 2.5 lakh a year means a combined employee contribution of about Rs 20,833 per month. With a 12% mandatory EPF, an employee with Basic + DA of Rs 50,000 already puts in Rs 6,000 per month, so up to about Rs 14,800 per month of VPF stays fully tax free. Above that, VPF still earns 8.25%, but the interest on the excess is taxed at your slab rate, which brings the post tax return for a 30% slab taxpayer down to roughly 5.8% on that portion. The calculator flags this for you in the tax check box.
Your own EPF and VPF contributions count towards the Rs 1.5 lakh deduction under Section 80C of the Income Tax Act, 1961. From 1 April 2026 the Income Tax Act, 2025 is in force and the same deduction lives in Section 123 read with Schedule XV, with the limit unchanged at Rs 1.5 lakh. The deduction is available only if you file under the old regime. If you are on the new (default) regime, VPF gives you no deduction on the way in, but the interest and maturity remain exempt within the Rs 2.5 lakh rule, so it still works as a guaranteed, tax efficient debt investment.
VPF money is pooled with your EPF, so it can be withdrawn only under EPF rules: on retirement, on unemployment (the EPFO board decided in October 2025 to lengthen the wait for full premature settlement from 2 to 12 months), or through partial withdrawals for house purchase, medical treatment, education, marriage and similar reasons. If you withdraw after five years of continuous service (service with previous employers counts if the PF was transferred), the whole amount is exempt, except interest that was already taxed under the Rs 2.5 lakh rule. If you withdraw before five years and the amount is Rs 50,000 or more, TDS at 10% applies under Section 192A when PAN is provided, and the amount becomes taxable in that year (including a reversal of earlier 80C benefits). Form 15G or 15H avoids TDS only if your total income is below the taxable limit.
| Feature | VPF | PPF | NPS (Tier 1) |
|---|---|---|---|
| Return | 8.25% (EPF rate, revised yearly) | 7.1% for October to December 2026 (revised quarterly) | Market linked, typically 9 to 12% historically |
| Annual limit | Up to 100% of Basic + DA; interest taxable above Rs 2.5 lakh contribution | Rs 1.5 lakh | No cap; deductions capped |
| Lock-in | Until retirement or unemployment (see the PF withdrawal rules); partial withdrawals allowed | 15 years, partial from year 7 | Until 60, limited partial withdrawals |
| Tax on the way in | 80C (old regime) | 80C (old regime) | 80CCD(1), 80CCD(1B), 80CCD(2) |
| Tax on the way out | Exempt after 5 years (subject to Rs 2.5 lakh rule) | Fully exempt | 60% lump sum exempt, annuity taxable |
For most salaried employees the practical order is: fill VPF up to the point where EPF + VPF reaches Rs 2.5 lakh a year, because that is the highest guaranteed, tax free return available; then consider PPF or NPS for anything more. If you are looking at VPF for a new job, run the in-hand salary calculator first, since VPF reduces your monthly take home by the full contribution amount. The EPF calculator covers the employer side, and the PF withdrawal calculator shows how much you can take out and when.
Rules last checked October 2026; the official sources are listed below. Spotted a wrong value or an outdated rule? Write to [email protected] and we will fix it.
Employers adding VPF options to payroll can also use GetHirePlus to screen and interview candidates for open roles.
Official sources used for the rates and rules on this page:
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