To open a VPF account, the employee should write a request letter to the employer to include him/her in the VPF (Voluntary Provident Fund) scheme from a specific date and the VPF contribution amount. Now the employer will add the additional VPF contribution to the ECR statement and make the payment during EPF returns.
There is no need to open a separate VPF account for the employee, as VPF is an extension of the EPF scheme, the employee can continue the same UAN number.
How to Fill the ECR for Voluntary PF Contribution
1. To make the VPF contribution employer should manually update the ‘EPF_CONTRI_REMITTED’ column to the higher PF contribution amount (EPF + VPF) in the ECR file.
2. Also, adjust the ‘EPF_EPS_DIFF_REMITTED’ column to ensure that the employer’s EPF contribution doesn’t exceed the required amount. Because the employer doesn’t need to pay the additional PF amount on VPF.
3. There is no need to change the ‘EPF_WAGES’ column.
4. To remember the VPF contribution each month, you could:
- Maintain a separate record: Keep a separate spreadsheet or document where you track all employees’ VPF contributions.
- Use Payroll Software: If you use payroll software, it might have the capability to track these contributions automatically and integrate them into the ECR file.
VPF Application Forms
Here is the VPF application form that has to be submitted by the Employee. The employer needs to keep the filled VPF application forms or letters in the employee records file, which can be useful for audit purposes.
Any existing employee contributing to the EPF scheme, can contrition to VPF as well.
Employees can contribute up to 100% of the basic wage under VPF contribution.
Employees can opt out of VPF at the start of the financial year. For that Employees should write a request letter to the employer to opt-out of him/her of VPF.
The interest earned on VPF is tax-free, if the total VPF contribution of the employee is below 250000 Rs. If it it exceeds then the interest will be taxed according to the income tax slab limit of the employee.