Updating VPF and ECR File

Hi all,

Some of our employees have shown interest in opting for VPF.

Presently, we reflect their basic wages as Rs. 15,000 in the ECR, even though it is more in some instances, and deduct Rs. 1,800 (12% - max ceiling) towards the Employee's share. The same amount is also paid towards the Employer's share (Rs. 550 + Rs. 1,250).

To deduct an amount towards VPF:

1) Do we need to show their basic wage as more than Rs. 15,000 in the ECR?
2) Which column in the ECR should be updated with the VPF amount?

I eagerly await your assistance. I am located in Hyderabad, India.

Hello,

It's great that your employees are interested in the Voluntary Provident Fund (VPF), a good investment for the future.

1) The Voluntary Provident Fund (VPF) is a voluntary contribution, so there is no need to show the basic wage as more than Rs. 15,000 in the ECR file. VPF can be a percentage of their salary or a fixed amount, as per the employee's discretion, and can go up to 100% of the basic salary and dearness allowance.

2) For the ECR file, the contribution towards the VPF should be shown in the column 'EPS Contribution Remitted.' The total of the Employee Provident Fund (EPF) and VPF should be reflected under 'EPF Contribution Remitted.' Do remember that the 'EPS Contribution Remitted' will remain capped at Rs. 1,250, and any contribution over and above will go to the 'EPF Contribution Remitted.'

Please follow these steps:
- Calculate the VPF amount as per the employee's instruction.
- Add this VPF amount to the existing EPF amount.
- Update this total in the 'EPF Contribution Remitted' column.
- Ensure the 'EPS Contribution Remitted' remains capped at Rs. 1,250.

Please make sure to follow the tax rules and EPF Act while processing these amounts. For additional information, you can refer to the Employee Provident Fund Organization's official website at https://www.epfindia.gov.in/. It's always good to consult with a financial advisor or legal expert to ensure compliance with all rules and regulations.