EPF: If you are trying to save tax by contributing more than 2.5 lakhs annually to the Employees’ Provident Fund (EPF), then first of all, forget it. You will have to pay tax in any case on contribution of more than 2.5 lakhs. Despite this, if you want to contribute more than that amount in PF, then one important thing will have to be done for that and that is that you have to open two PF accounts for the contribution of more than 2.5 lakhs.
Tax will have to be paid on the interest deposited in PF
According to media reports, all those employees working in the government and private sector will now have to operate two accounts, who want to deposit more than Rs 2.5 lakh in their PF account. There is also news that it is very important to pay tax on the interest received in lieu of depositing more than 2.5 lakh rupees in PF. This decision of Employees’ Provident Fund Organization (EPFO) will affect lakhs of employees of the country working in government and private sector institutions.
The new rule will be applicable from April 1
Gaurav Gupta of Zonal Tax Bar Association told the media that the system of payment of tax to the employees on PF deposits will be implemented from April 1, 2022. However, employees working in the government and private sector do not yet have to pay tax on the interest received on the amount deposited in PF, but after the new rule comes into force from April 1, they will get tax on the amount of more than 2.5 lakhs. Tax will also have to be paid on the interest earned.
Have to open two pf accounts
Gaurav Gupta of Zonal Tax Bar Association further says that government and private sector employees who want to deposit more than Rs 2.5 lakh in their PF account, they will have to open two PF accounts for this. He told that the employer of those employees who have to contribute more than 2.5 lakhs in their PF, the company will open an additional PF account of those employees, only then they can deposit more than 2.5 lakh rupees in their PF account.