EPFO: Important news for PF subscribers. The Central Government is going to make changes in the rules of Provident Fund from 1st April i.e. today. This will shock the PF subscribers.
New Delhi: EPFO: There is important news for PF subscribers. The Central Government is going to make changes in the rules of Provident Fund from 1st April i.e. today. Now the amount deposited in PF in excess of a limit will be taxed. According to the new rules, interest earned on deposits of more than Rs 2.50 lakh in a financial year will have to be taxed.
Tax will be levied only on the deposit amount of the employee.
One important thing here is that this rule is only for the amount of the employee deposited in PF. This rule will not apply to the amount deposited by the company in your PF.
That is, if an employee working in the private sector contributes Rs 5 lakh in a financial year to the PF account, then only the amount of Rs 2.5 lakh will be taxed. The remaining 2.5 lakh rupees will not come under the tax net.
Most of the people will not be affected
Tax expert says that the new rule will not affect most of the EPF members. Because this rule will be applicable only to people earning 20.83 lakh or more annually. There are about 6 crore subscribers of EPF. The salary of most of them is less than this limit. In the case of government employees, the annual contribution of Rs 5 lakh in PF will be taxed.
Explain that 12 percent of the basic salary of the employee is deposited in EPF. At the same time, as much money as the employee gives, the company also deposits the same amount in the PF account of the employee. The government pays interest on this deposit.
Interest rates are the lowest in 40 years,
Remember that in the past, the government had reduced the interest rate of PF from 8.5 percent to 8.1 percent. PF interest rates were cut by 0.40 percent. This is the lowest interest rate in the last 40 years. In 1977-78, the EPFO had given an interest of 8 per cent.
