1. Crux / Summary in Brief
Interest of more than ₹2.5 lakh earned annually from contribution to Employees Provident Fund (EPF) or Government Provident Fund (GPF) will not be taxed retrospectively, Expenditure Secretary TV Somanathan clarified.
️2. Announcement was made at:
BusinessLine webinar on ‘De-coding the Budget 2021-22’.
The webinar was powered by HDFC Bank with BSE as an associate sponsor.
3. EPF taxation
EPF is the only saving instrument where one gets tax exemption at the time of contribution, then on the accumulation and, finally, at the time of withdrawal. This is called EEE (Exempt-Exempt-Exempt) mechanism.
4. Additional info – Exemption
- GPF and EPF flows into an account above ₹2.5 lakh will be directed to a separate sub-account.
- The primary account including your past balance as on March 31, 2021 will always remain tax free;
- Interest will also not have to be declared.
5. Source of this information: