New PF tax rule from this month, here s how your income will be affected
The benefit of this exemption will be only to those PF account holders in which no contribution has been made by the employer. Representative image
Updated: Apr 5, 2021, 10:28 AM IST
As the new financial year has begun, the new rule for tax on Provident Fund interest will come into force from this month. In Budget 2021, Union Finance Minister Nirmala Sitharaman had announced that the government has decided to increase the exemption limit on interest on PF to Rs 5 lakh. Earlier, the limit was Rs 2.5 lakh.
Sitharaman had announced that the interest on the investment of up to Rs 2.5 lakh per annum in PF will be tax-free, but tax will be imposed on the interest earned on the investment made above the Rs 2.5 lakh limit. It includes the contribution of both the employee and the company or employer. The government had taken this step to restrict those who earn interest by putting thei
Rs 62,500 crore in EPFO accounts of those with fat salaries, Rs 103 crore top balance - In Budget 2021, govt has proposed that if the annual contribution in the EPF account is over Rs 2.50 lakh, there will be no tax exemption on interest.
EPFO started crediting 8.5 per cent interest on EPF for 2019-20 for its over six crore members.
Provident Fund (PF) Balance: Recently, retirement fund body Employees Provident Fund Organisation (EPFO) announced that it has started crediting 8.5 per cent rate of interest on employees provident fund (EPF) for 2019-20 for its over six crore members. Now account holders can see their updated EPF accounts with credit of 8.5 per cent rate of interest for 2019-20. According to the EPF website - epfindia.gov.in, in an EPF account, an employee contributes 12 per cent of his or her salary towards the account, and an equal amount is contributed by the employer. EPFO is the nodal body of EPF and allows subscribers to view the EPF passbook online through its website. EFPO also provides the balance information via missed call facility and SMS service. (
EPF Account: How to update bank account details
There have been cases where people close their bank accounts but forget to change or update the new bank account in their EPF Account. Wrong bank account information can lead to unsuccessful credit transactions.
Representative Image
Employees Provident Fund Organisation (EPFO) enables subscribers to make withdrawals from their EPF Account. The members must have the correct bank account in the records in order to ensure hassle-free withdrawals.
There have been cases where people close their bank accounts but forget to change or update the new bank account in their EPF Account. Wrong bank account information can lead to unsuccessful credit transactions.