Interest earned on deposits above Rs 2.5 lakh in EPF account will now come under the purview of tax. The Central Board of Direct Taxes (CBDT) has notified ITR-1 to ITR-5 forms.
The Income Tax Department has notified the new ITR Form for filing Income Tax Return for the financial year 2021-22 . In the new ITR form, interest earned on Provident Fund deposits above Rs 2.5 lakh per annum will have to be disclosed. Interest earned on deposits above Rs 2.5 lakh in EPF account will now come under the tax net.
If you do not give this information in the new ITI form, a notice from the Income Tax Department can come. The Central Board of Direct Taxes ( CBDT ) has notified ITR-1 to ITR-5 form. ITR forms (ITR-6 and ITR-7) for corporates and trusts will be notified later.
A new provision was added in the Finance Act 2021. If an employee contributes more than Rs 2.5 lakh to his provident fund in a financial year, then interest on deposit amount above Rs 2.5 lakh will be taxed. However, for employees whose provident fund is not contributed by the company, then this limit is increased from Rs 2.5 lakh to Rs 5 lakh.
To levy tax on high value depositors in Employees’ Provident Fund (EPF), the government had last year said that employee contributions of more than Rs 2.5 lakh per year to the Provident Fund will be taxed with effect from April 1, 2021.
Two separate accounts will be created
CBDT has notified that entities are required to maintain two separate PF accounts. One of these will be for taxable contribution while the other will be for non-taxable contribution from April 1, 2021.
Not giving this information in the new ITR form may cost you heavily. You may get a notice from the Income Tax Department or have to pay a fine.
Which form is for you-
ITR-1 (Sahaj) Form – Individuals with income up to Rs 50 lakh who receive income from salary, a house / other sources (interest etc.). The ITR-1 form has been largely kept the same as last year. Income from overseas retirement benefit accounts has been added to the net salary in the form.
ITR Form 2- This is for those who are salaried and have income from other sources but not from business. In other words, taxpayers other than business income category can file this ITR 2. Salary or pension earners, House property earners, Short and long capital gains, Horse riding betting, Lottery or legal gambling links, Directors in a company, Investing in unlisted companies, Earners In this, when the income of wife and children is added, people with such income can fill ITR Form-2.
