New PF tax rules will kick in from April 1, 2021: Here's how it will impact you
At present there is no tax on interest earned on provident fund deposits. In the previous 2020 Budget, the finance minister had capped the tax exemption on employer’s contribution to PF, NPS and superannuation funds at an aggregate of Rs 7.5 lakh per annum.
At present there is no tax on interest earned on provident fund deposits. In the previous 2020 Budget, the finance minister had capped the tax exemption on employer’s contribution to PF, NPS and superannuation funds at an aggregate of Rs 7.5 lakh per annum.
Impact of New PF tax rules from April 1, 2021
Union Finance Minister Nirmala Sitharaman on February 1, announcing the Union Budget 2021 said that interest on employee contributions to PF over a certain amount has now been made taxable. The Budget for the fiscal year beginning April will now make interest on employee contributions to PF above Rs 2.5 lakhs per annum taxable effective April 1, 2021.