Voluntary Provident Fund (VPF). It is an extension of the Employee Provident Fund (EPF). VPF allows employees to contribute an additional portion of their salary towards their EPF account voluntarily. The contribution made to VPF is over and above the mandatory contribution made by both the employee and employer towards EPF.
The benefits of VPF are as follows:
- VPF offers higher interest rates compared to fixed deposit rates, enabling employees to earn higher returns.
- Contributions to VPF are eligible for tax benefits and the interest earned and maturity amount are tax-exempt.
- VPF promotes long-term savings for future financial security and serves as a retirement planning tool.
- Managed by the government's EPFO, VPF is a safe investment with no investment risk as funds are invested in low-risk instruments.
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