Outlook Money
While EPF has a 12% cap, VPF has no limit. Individuals can contribute 100% of their basic salary to VPF.
As per the income tax rule, VPF contributions fall under the exempt-exempt-exempt (EEE) category.
VPF is eligible for tax benefits under Section 80C up to Rs 1.5 lakh in a financial year.
The combined investment limit for EPF and VPF was set at Rs 2.5 lakh for tax exemptions on interest, exceeding which will attract tax.
The maturity proceeds from VPF are tax-free, just like EPF.
VPF can boost savings for retirement while offering flexibility to withdraw money for emergencies.
Compiled By Himani Verma