Is PF Interest taxable beyond 2.5 Lakhs ?
This query is : Resolved
26 February 2023
Is PF Interest taxable beyond 2.5 Lakhs for entire contribution or excludes employer contribution ?
26 February 2023
Excludes employer contribution.
After Budget 2021, interest on an employee's contribution to an EPF account above Rs 2.5 lakh during the financial year is taxable in the hands of the employee.
After Budget 2021, interest on an employee's contribution to an EPF account above Rs 2.5 lakh during the financial year is taxable in the hands of the employee.
26 February 2023
Thanks you so much. How this tax to be paid ? I don't think that Govt. has still created separate account for this ?
26 February 2023
any interest credited to the PF account of an employee shall be tax-free in case of contributions up to Rs 2.5 lakh every year. However, any interest on the contribution of an employee of over Rs 2.5 lakh will be taxed in the hands of the employee. In case an employer does not contribute to the PF account of the employee, then the threshold limit applicable will be Rs 5 lakh of the contribution of the employee
27 February 2023
In case employee portion is 3 lakhs and employer portion is 3 lakhs. Will 50 thousand be taxed from employee portion ? Or 1 lakh will be taxed as total PF is 1 lakh more than than 5 lakh ceiling.
27 February 2023
50 thousand be taxed from employee portion.
28 February 2023
One follow up query - Should we wait to see exact taxable interest in PF statement or compute ourselves and pay tax ?
28 February 2023
Wait and see the taxable amount in statement.
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