What kind of news will the government give to the salaried class? Decision on PF interest rate in important meeting
The Employees Provident Fund Organization (Employees Provident Fund Organization), the EPFO’s Central Board of Trustees (CBT), is having an important meeting on Thursday in Srinagar, with crores of PF Account Holders May be decided on the rate of interest to be paid in the financial year 2020-21.
Significantly, in this year’s general budget, Union Finance Minister Nirmala Sitharaman has proposed to restrict the interest earned on their EPF corpus to ‘restrict’, ie, to high-income employees every year. The limit has been announced to limit the exemption from tax on earnings on provident fund, or PF.
It has been decided that only the interest that the PF account holders get on the annual contribution of up to two and a half lakh rupees will be exempt from tax. Apart from this, any high-income PF account holder, whose annual contribution is more than 2.5 lakh rupees, will have to pay income tax on the interest income. This new proposal will be applicable to the annual employee contribution made after April 1, 2021.
It was said in the budget that people whose annual contribution to PF in a financial year is more than 2.5 lakh rupees, will not get tax rebate on its interest. In the current era, there is no income tax of any kind on the interest received on the contribution of PF.