New PF tax rules to come into effect from April 1, here's how it will affect you - Nirmala Sitharaman in Budget 2021 announced that interest on employee contributions to PF of over Rs 2.5 lakh per annum would be taxed from April 1.
Updated Feb 20, 2021 | 09:21 IST
Interest on employee’s contribution towards Provident Fund (PF) account above Rs 2.5 lakh per annum will be taxable with effect from April 1. This will affect VPF investors Debt mutual funds v/s VPF: Which is better for high-salaried individuals post Budget rule-change | Photo Credit: Thinkstock
One proposal in the Union Budget 2021 which is likely to hit wealthy investors in voluntary provident fund (VPF) may prompt them to instead move to debt mutual funds.
According to the proposal which comes into effect on April 1, 2021, interest on employee’s contribution towards Provident Fund (PF) account above Rs 2.5 lakh per annum (which means the minimum basic salary of Rs 1.75 lakhs) will be taxable with effect from April 1. Earlier the interest earned on PF was exempt from tax.
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Updated Feb 13, 2021 | 13:06 IST
If we assume that the present interest rate of 7.1% on PPF remains constant in the long term, one can easily accumulate a hefty retirement kitty by the time of his superannuation. Here s how you can accumulate a tax-free retirement kitty of over Rs 1 crore through PPF
New Delhi: Public Provident Fund (PPF) is by far one of the most popular long term debt investment products available in India. One of the biggest advantage of PPF is that it offers guaranteed tax-free return, which you can not get in other long term investment instruments like NPS, mutual fund SIP. Although life insurance products offer tax-free returns, the return is not guaranteed and is very less compared to PPF, and return from NPS is not guaranteed but it is partially tax-free.