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
PF to income tax to air travel, 10 ways your life will change from today
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The interest earned on employee s contribution above ₹2.5 lakh in a year will be taxable from this month. Buying a pension cover will become easier. Take a look at key changes that are going to take place from 1 April
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With the beginning of new financial year from Thursday, there will be a host of changes in how you spend money. From changes airfare to standard insurance policies, several new norms will be effective from 1 April. The interest earned on employee s contribution above ₹2.5 lakh in a year will be taxable from this month. Buying a pension cover will become easier.
Under the existing tax provisions, interest received/accrued from employee’s provident fund (EPF) is exempt from tax. The new rules will potentially impact employees in high income bracket
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.
PF tax prompted by HNIs availing waiver
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Last Updated: Feb 05, 2021, 08:51 AM IST
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“One of the highest contributors has more than ₹103 crore in his PF account, followed by two second highest ones having more than ₹86 crore each,” said a government official.
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New Delhi: A government study ahead of the budget found that about 123,000 people had a combined Employees Provident Fund (EPF) corpus of ₹62,500 crore in FY19. This prompted the government to remove the tax exemption on annual contributions of ₹2.5 lakh and above to provident fund accounts in the February 1 budget. The EPF has 63.3 million contributing members.