Have you heard of "Voluntary Provident Fund"? Not all employers provide the same to employees.
Actually Section 80C of IT provides you a facility to show the provident fund (monthly deduction) for a FY as exemption (subject to a maximum of 1,00,000/-).
But usually PF = 12% Basic and hence it will not reach Rs.1,00,000/- in most cases unless you are super honcho to receive this much as a PF.
But as per 80C, if the employer provides a facility where by employee "volunteers" for an additional amount called as VPF, subject to a maximum of Rs.1,00,000/- it can be exempted from IT.
What more, this gives another direct benefit to the employees, in terms of benefit of compounding.
Eg: say your monthly PF = 2,000/- Total PF in FY = 24,000/- Where as if you opt for 3,000/- more for VPF, additional Rs.36,0000/- also gets added to 80C and exempted.
But the real benefit is, it becomes a monthly saving AT THE SAME RATE as PF. So in essence it gives a SIP (Systematic Investment Plan) type of savings at an annual rate of interest as 9% or 8.5% as per prevailing PF rates.
Even if you choose to change your employer at the end of year (for obvious reasons), you can withdraw this monthly savings and enjoy the tax benefit as well as the accrued total with interest.
Now, tell me who gives an assured 8.5% rate of return on a SIP with tax benefit added to it?
If you have this scheme, please do OPT for this at once. Better late than never....