Voluntary Provident Fund: Should you invest beyond EPF? Interest rates, tax rules and the ₹2.5 lakh limit explained

The Voluntary Provident Fund (VPF) is an option for salaried employees to invest beyond their mandatory Employee Provident Fund (EPF) contributions, currently at an 8.25% interest rate. While the interest earned up to ₹2.5 lakh in a financial year is tax-free, any amount above this limit is taxable. It's important to note that VPF contributions are considered part of one's total income for tax purposes, and premature withdrawal is only allowed under certain conditions, such as for medical treatment or higher education.