From April 1, both Employees’ Provident Fund (EPF) and General Provident Fund (GPF) will be brought under the ambit of this rule.
PF Rule: This is work news for thousands of employees of the country. There is going to be a change in the rules regarding PF from the new financial year i.e. 1st April. This will have a direct impact on your pocket. This change matters for all government and private sector employees. Now the Income Tax Department will start taxing PF returns from April 1, 2022. The Central Board of Direct Taxes (CBDT) will start implementing Income Tax.
From April 1, both Employees’ Provident Fund (EPF) and General Provident Fund (GPF) will be brought under the ambit of this rule. If you understand in simple words, now your PF will also start taxing. It is also reported that EPFO is going to make some new changes in the rules of Provident Fund. Existing PF accounts can be divided into two parts with effect from April 1, 2022. In this, the interest income will be taxed if the contribution exceeds the limit of the employee. In fact,
Now it will be
As per the Central Board of Direct Taxes (CBDT), income tax will be charged from the salaries of employees, which means that if a private employee or a government employee has contributed more than the said limit, the interest income will be treated as income and IT The department will collect the tax. The tax deduction on this will be mentioned in Form 16.
Announced in the budget
Finance Minister Nirmala Sitharaman made a special announcement in the Union Budget 2021. He had imposed a tax-free contribution cap of up to Rs 2.5 lakh in the EPF account, which means the interest income of the contribution over this would be taxed. At the same time, in the case of government employees, the limit of tax free contribution to GPF is Rs 5 lakh per annum.
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