• J. MEHTA & Company
  • J. MEHTA & Company
  • J. MEHTA & Company
  • J. MEHTA & Company
  • J. MEHTA & Company

Taxability of Interest Income from Provident Fund

Taxability of Interest Income from Provident Fund

Previous:

Interest Income earned on the EPF Contribution were totally Tax Free without any restriction of amount. This was helpful for employees with high income or people contributing voluntarily at higher rates.

Proposed:

It is proposed to restrict tax exemption for the Interest Income earned on the “Employees’ contribution” to various provident funds to the annual contribution of Rs. 2.5 lakh. This restriction shall be applicable only for the contribution made on or after 01.04.2021

Take Away:

If an Employee’s Annual EPF Contribution exceeds Rs. 2.5 Lakh, then the Interest Income earned shall be subject to tax implication, but only Interest earned for the Employees Part of Contribution