EPF vs PPF Vs VPF – CTC and Salary Slip

Compare Employer Provident Fund (EPF) vs PPF (Public Provident Fund) vs VPF (Voluntary Provident Fund). EPF, VPF @12% of basic. Open all EPF+VPF and PPF.

Written by Anil Gupta
  By Anil Gupta          Updated  30 Dec, 19


EPF vs PPF Vs VPF – What’s the difference?

There are three (3) types of provident fund amounts that are associated with a salaried person.

1. Employer Provident Fund or Provident Fund (EPF)

Employers in India with an employee base of 20 or more employees are required to comply with the Employee provident fund schemes run by government. This scheme’s aim is to contribute some portion (generally 12%) of your monthly salary towards your retirement benefits.

A small part of it (a chunk from 12% itself) is also contributed towards pension scheme.

This is a business expense which your employer contributes to YOUR PF account from their own pocket.
The amount of PF that is mentioned on your CTC letter is actually employer contributed PF.

This amount is tax free for you.
It is NOT included in the yearly tax rebate amount for investments.

2. Employee Provident Fund (VPF)

Government PF scheme also mandates that you as an employee should also contribute to YOUR PF account monthly i.e. an equal portion (generally 12%) or any other amount that you want to.
This is also known as Voluntary Provident Fund (VPF).

The amount that you see on your monthly salary pay slip as deduction is actually this amount and NOT the PF (Employer provident fund). The employer PF is neither added to your income nor deducted.

Hence, it is NOT reflected in your pay slip but is shown on CTC letter.

Since VPF is taken out of your pocket, it is shown on the deductions side of your salary slip.
This is also the reason behind NOT showing VPF explicitly in your CTC letter.

VPF is an expense for you and NOT your employer.

This amount is considered as an investment by you and forms part of the yearly tax rebate investments.

3. Public Provident Fund (PPF)

This is NOT related to your employer at all.
It is basically a personal provident fund account that you can open with any of the designated banks like SBI etc..

It is like a savings account that you can open any time. Also, there is NO obligation to open it.

This account is again a long term investment account and helps you save income tax as the amount credited to this account is allowed to be included in your tax rebate investments.

Please note that the amount in this account is neither mentioned on CTC letter nor on your pay slip.

But yes, if you declared it in your company to save tax, it will be mentioned on FORM 16 (Salary and tax calculation form issued by your employer).

What is the difference between PPF and EPF?

PPF is an account run by the central government, available to open by anyone including business man, self employed and salaried class.
EPF is a retirement benefit applicable only for salaried employees. Any non-salaried person cannot open an EPF account.

What is the difference between PPF and EPF?

PPF is an account run by the central government, available to open by anyone including business man, self employed and salaried class.
VPF is the amount that a salaried employee contributes to his employer provided PF account (Also known as EPF). Any non-salaried person cannot open this kind of PF account.
This account is opened by employer.

Is PF and PPF same?

PF is generally referred as the employer provided PF account.
PPF is open for general public and is run by central govt. of India.


   12 Useful Questions & Answers from comments

  1. Monika Nimmagadda
    Monika Nimmagadda 3 May, 19 at 4:58 pm

    Hello All, I run into a new issue with our company where HR says the PF will be DEDUCTED TWICE FROM OUR SALARY EVERY MONTH,one is employer PF and one Is Employee PF and what our HR says is, for the employer PF, the company will deduct salary from our net salary and pays it to my PF account which I don’t agree at all. Why will I have to pay the PF Double? If the PF is deducted from my salary I can see that in my payslip and the amount which is not mentioned in the Payslip is going to my PF account as I was told by my HR? How true is that?It means that i’m paying 3600 every month which I don’t want to. Please advice.

    • Monika Nimmagadda
      Monika Nimmagadda 3 May, 19 at 4:58 pm

      Also, Employer PF is something which is done from their own pocket and they cannot just take it from our pay without even mentioning it. Am I right?

      • Anil Gupta
        Anil Gupta 4 May, 19 at 2:33 pm

        Employer PF is also part of your total annual pay.
        VPF is deducted from your monthly salary.

  2. shanak
    shanak 11 Jun, 17 at 1:24 am

    hi i will be joining the new company that is June 15th’ 2017 They are offered TTL CTC is 12 Lacs per annum. my basic is Rs 6,48,120/- ..
    i little confused about my PF they are mentioned in CTC pf contribution is Rs 1800/- only…as per PF rule is in basic 12% …how would it come rs 1800/- can you please explain on this 1800/-..tq

    • Anil Gupta
      Anil Gupta 11 Jun, 17 at 11:03 am

      The PF rule is 12% of 15000 (=1800) as minimum value for calculation. Your basic may be higher than this but your company can decide to pay you minimum (i.e. 12% of 15k) or 12% of actual basic.

  3. Ratnakar Ch
    Ratnakar Ch 8 Dec, 15 at 4:32 am

    hii What is the Minimum period to take the PPF amount.. and how much interest we can expect for a minimu tenure of 5 years..

    • Anil Gupta
      Anil Gupta 8 Dec, 15 at 6:37 am

      1. PPF account has 15 year lock-in.
      2. You can withdraw upto 50% of balance in your PPF account starting 7th year.
      3. The interest is 8.5% per annum.

  4. bhushan talreja
    bhushan talreja 4 Oct, 14 at 8:55 am

    m working in an ngo n from this month, they have started deducting 12% pf (which they dint do earlier) coz of the ceiling being raised from 6500 to 15000.
    now when we are asking them about their respective contribution to pf, they r giving lame excuses like we have CTC system n our contribution is alrdy included in ur salary.
    since i am a fresher, i have little knowledge of rules but as far as i know contribution to pf is from both sides – employer a swell as employee.
    please put a light – can they get away from depositing their share while they r deucting it from our salary?

    • Anil Gupta
      Anil Gupta 4 Oct, 14 at 3:37 pm

      Hi Bhushan,
      1. Yes, it is mandatory for the employer to contribute to PF with your contribution.
      2. It is okay to say that employer’s PF contribution is counted as part of CTC. But, they should certainly deposit it in the PF account and should not pay you as cash each month. If they are paying it as cash each month to you (or in your bank account), it cannot be counted as PF contribution. PF contribution strictly means depositing money in the designated PF account (this is the same account where they are depositing your portion of PF as well).

      Let me know if you need more information.

  5. Ravi Prakash Sheshappa
    Ravi Prakash Sheshappa 15 Oct, 11 at 9:55 am

    Soan, the information was very basic and must be sufficient to certain readers, who just wanted to understand what each term is. I would have loved, had you written more about the PPF :). I am really, kind of, excited to share with my buddies about PPF and how to take advantage of it after I learnt about it recently. The down side of it is, 15 year lock-in period. But, the gain it can get comparatively is worth a look and I even insist everyone should start one. The annual minimum deposit is just about Rs. 500/-  (which is like 42/- per month) to keep the account started and active. If you have surplus in some years, you can invest upto 70K. The rules are little tricky and needs to be understood. But if someone starts early (right now) at least with minimum amount in the initial years, later years can be used make short-term investments and get the maturity tax-free, unlike FD or many other Dept investments.
    It is a wonderful subject you should put up an article on. So that your blog followers take advantage of it. 🙂

    • Anil Gupta
      Anil Gupta 15 Oct, 11 at 11:23 pm

      Thanks Ravi for taking out time and writing and in your views. I appreciate your response.
      Yes, you are right that the article targets the basic features of PPF. I will definitely work on your suggestion and cover more about it in a new one.
      FYI, the government is thinking about a proposal to increase the 70k limit to 1lakh per year along with increasing the interest rate as per the latest news. If it happens, it will be good news for all.

      • Rosalin
        Rosalin 5 Apr, 12 at 10:13 pm

        Thank You Soan .for me as a student it is quite beneficial and wanted to know how the PPF helps in tax-reduction for employees.