Amit is 34 and works as an accounts executive. A few years ago he asked his company to deduct a bigger chunk of his salary for VPF, because the interest looked great. Then he forgot all about it.

Last month, with the new labour codes and PF rules all over the news, he finally opened his payslip and froze. His EMI had gone up, a family function was coming, and that VPF line suddenly looked huge. Could he cut it down? And if he stopped, would the money he'd already saved disappear?

Maybe you're asking the same thing. Here are the answers, in plain words.

Can you stop or reduce your VPF deduction? Yes, you can. VPF is optional. The Code on Social Security, 2020 is now in force, and the new Employees' Provident Funds Scheme, 2026 (notified on 29 June 2026) says in Paragraph 19 that you can reduce or stop extra PF contributions at any time. The money already in your PF stays safe and keeps earning interest, which is 8.25% for FY 2025-26. The only thing to check is your company's payroll cut-off date.

Who is writing this?

This guide comes from the team at Praans Consultech, a Gurugram-based firm with a PAN India presence through its own team, helping companies stay on the right side of labour laws. Startups, small and mid-sized businesses, and larger employers come to us for PF and ESI work, registrations, filings, compliance outsourcing, audits, compliance software and end-to-end labour law compliance, so that business owners can focus on running their business instead of chasing deadlines. Need help with PF, ESI or any other labour law compliance? Call us on 9050576838 or email info@praansconsultech.com.

The author, Sandeep Kumar, is a founder of Praans Consultech. According to published profiles, he holds law degrees (LLB and LLM), is an XLRI alumnus pursuing a PhD, and has more than 15 years of experience in labour law, business registration, and startup advisory.

In this guide

• What exactly is VPF?

• What changed under the new Code and EPF Scheme 2026?

• The law behind this: sections at a glance

• Does your employer have to deposit the same amount as your VPF?

• Can you stop VPF anytime, or only in April?

• How to stop or reduce VPF: step by step

• What happens to the money already saved?

• Should you cut it down?

• Frequently asked questions

What exactly is VPF?

Think of your PF as a locked piggy bank. Every month a fixed share of your salary goes in from your side, and your employer drops in an equal share. That's the compulsory part, currently 12% each.

VPF is when you choose to put extra money into the same piggy bank. You can add up to 100% of your basic pay plus dearness allowance. It earns the same interest as your regular PF, and it isn't a separate account. It sits inside your normal PF balance.

What changed under the new Code and EPF Scheme 2026?

The old Employees' Provident Funds Scheme, 1952 has been replaced. For a salaried person, three changes matter.

1. Reducing or stopping extra contributions is now written down. Either you or your employer can choose to reduce or stop additional voluntary contributions. Earlier, this was usually treated as a joint decision with your company.

2. PF is calculated on "wages". Basic pay, dearness allowance and retaining allowance count. If the allowances kept outside this meaning add up to more than half of your total pay, the extra part is added back. So if your PF deduction went up recently, it may be the compulsory part growing, not your VPF.

3. The wage ceiling has moved. From 17 September 2026, the monthly ceiling for compulsory PF went from ₹15,000 to ₹25,000. Contribution on salary above the ceiling is voluntary.

The law behind this: sections at a glance

If your HR team asks "where does it say this?", here are the exact places.

Law	Section / Paragraph	What it means for you
Code on Social Security, 2020 (Act 36 of 2020)	Section 2(88)	Defines "wages", the base for PF calculation.
Code on Social Security, 2020	Section 15	Allows the Central Government to frame the Employees' Provident Fund Scheme.
Code on Social Security, 2020	Section 16	Employee's share equals the employer's, and the employee may contribute more. The employer need not match the extra.
EPF Scheme, 2026 (G.S.R. 525(E))	Paragraph 18	Compulsory contribution: 12% of wages (10% for some notified establishments), up to the wage ceiling.
EPF Scheme, 2026	Paragraph 19	Additional voluntary contributions: employer need not match, and either side can reduce or stop.
EPF Scheme, 2026	Paragraph 46	Partial withdrawals and the 25% minimum balance.

The Code was published in the Gazette of India (Extraordinary, Part II, Section 1, No. 61) on 29 September 2020 and came into force on 21 November 2025. The Scheme was notified on 29 June 2026 under Section 15(1)(a) of the Code, in the Gazette of India (Extraordinary, Part II, Section 3(i), No. 473). One small point: the Code's own text mentions 10% as the base rate, while the government has notified 12% for most establishments.

Does your employer have to deposit the same amount as your VPF?

No. Your employer's compulsory share stays at 12% of wages, up to the wage ceiling. Whatever you add as VPF is your choice, and your employer has no duty to match it. Section 16 of the Code and Paragraph 19 of the Scheme both say so. If a company wants to match, it can, and that money goes into your PF too.

One cost does fall on the employer: extra administrative charges on the wages on which voluntary contributions are made. So when you stop VPF, your employer's own share doesn't change.

Can you stop VPF anytime, or only in April?

Most companies used to say, "Change it only at the start of the financial year." Paragraph 19 doesn't set any such lock for voluntary contributions.

Experts do read it differently, though. Some say you should normally stay with your choice for the full year, with one change allowed. Others point out that the scheme doesn't say how often you can change it, so companies may fix their own windows. A few lawyers also believe the old scheme may still guide compliance until a transition period ends in November 2026.

So your right to reduce or stop is clear. The start date depends on your company's payroll process, and HR can tell you the exact cut-off.

How to stop or reduce VPF: step by step

There's no EPFO form for this. Your employer handles it through payroll.

1. Check your payslip. Note what's being deducted as VPF today.

2. Ask which part is compulsory. If your salary is high, confirm what's mandatory PF and what's voluntary for you. Only the voluntary part can be stopped.

3. Send a written request. Use your HR portal or email. Say whether you want to reduce it (and to what amount or percentage) or stop it fully, and from which month.

4. Ask for the cut-off date. Payroll often closes a week or two before month-end, so a request on the 28th may only start next month.

5. Verify the next payslip. Make sure the deduction really changed.

6. Check your EPFO passbook after a month or two.

Will the new wage ceiling change my VPF?

Not automatically. A legal note on the 17 September 2026 notification says it doesn't by itself force anyone's existing contribution down to ₹25,000. If you already pay PF on a higher salary, your company should review that arrangement separately. Check your October payslip, and ask HR if the numbers look different.

What happens to the money already saved?

Nothing bad. Stopping VPF only stops future extra deductions. Your old balance stays in your PF account and keeps earning interest every month.

VPF is part of your PF, so the normal PF withdrawal rules apply. Partial withdrawals now fall into three types: essential needs (illness, education, marriage), housing, and special circumstances. You need at least 12 months of service, and 25% of your eligible balance must stay in the account.

Should you cut it down?

When it makes sense

• Your budget is tight. A new EMI, a new baby or a job gap makes cash in hand worth more than a slightly higher return. Cutting VPF raises your take-home quickly.

• You're crossing the tax-free interest limit. Interest on your own PF contribution is tax-free only up to ₹2.5 lakh a year. If your employer contributes nothing, the limit is ₹5 lakh. Interest above that is taxed at your slab rate.

• You chose the new tax regime. The ₹1.5 lakh deduction for PF savings works only under the old regime. Without it, one big benefit of VPF is gone.

When to think twice

8.25% with no market risk is hard to find in safe savings, and money that never reaches your bank account rarely gets spent. If you're only a little short, try reducing rather than stopping. Going from 20% to 10% frees up cash and keeps the habit alive.

Frequently asked questions

Is VPF compulsory?

No. It's voluntary, and your employer doesn't have to add to it.

Does the employer have to deposit the same amount as the employee's VPF?

No. Section 16 of the Code and Paragraph 19 of the EPF Scheme, 2026 leave matching to the employer's choice.

Can I stop VPF in the middle of the year?

The EPF Scheme, 2026 lets you reduce or stop extra contributions at any time. Your company may have its own payroll windows, so confirm with HR.

Will I lose my old VPF money if I stop?

No. It stays in your PF account and keeps earning interest.

Can I start VPF again later?

Yes. Give HR a fresh request. The start date depends on your company's process.

Can I withdraw only my VPF money?

No. VPF isn't a separate account, so the normal PF withdrawal rules (Paragraph 46) apply to the whole balance.

Is VPF interest taxable?

Interest is tax-free up to ₹2.5 lakh of your yearly contribution (₹5 lakh if there's no employer contribution). Interest on the excess is taxable.

How to Stop or Reduce VPF (Voluntary Provident Fund) Deduction from Salary?

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