Explainer: Provident Fund Contributions Above Rs 2.5 Lakh To Be Taxed
NDTV
The government will tax PF contributions exceeding ₹ 2.50 lakh yearly - including the employee, the employer contributions and the interest earned.
The government will tax Provident Fund (PF) contributions exceeding ₹ 2.50 lakh yearly - including the employee and the employer contributions, and the interest earned. The limit has been set higher for government employees at ₹ 5 lakh.
The centre announced the tax levy, citing several cases of abuse by wealthy and high net-worth individuals who have deposited vast sums of money into their PF accounts to avoid paying taxes on the income earned during the year.
That comes at a time when the retirement body Employees Provident Fund Organisation (EPFO) has reduced interest rates to the lowest in more than 40 years for the current financial year 2021-22 (FY 22).
What does the latest PF tax mean to you?
