Save Rs 499 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

EPFO Tax above Rs 2.5 Lakh contribution

331 views

Save Share

Join Us Follow Us Add as Source

J S BHAVSAR

CONSULTING

1322 Points Posted on 04 October 2021

The EPFO has come up with a chakravyuh that even Guru Dronacharya cannot match.

https://www.rediff.com/business/column/why-is-modi-chipping-away-at-epfo/20211004.htm

Replies (2)

Quick Summary

New regulations from the EPFO mean that interest earned on Employees' Provident Fund (EPF) and Voluntary Provident Fund (VPF) contributions exceeding £2.5 lakh per financial year will now be taxable. This change, announced in the budget, raises questions about the practicalities of tax deduction and TDS, especially as interest is typically credited late in the year. The exact mechanisms for tax payment and TDS deduction remain unclear.

Rama chary Rachakonda

Master in Accounts & high court Advocate

9620 Points Posted on 04 October 2021

People with Employees' Provident Fund and Voluntary Provident Fund (VPF) contribution of over Rs 2.5 lakh per financial year will now have two separate PF accounts. Finance Minister Nirmala Sitharaman had announced, in this year's budget, that PF contribution of more than Rs 2.5 lakh in a fiscal will be taxable

J S BHAVSAR

CONSULTING

1322 Points Posted on 06 October 2021

Originally posted by : Rama chary Rachakonda
	People with Employees' Provident Fund and Voluntary Provident Fund (VPF) contribution of over Rs 2.5 lakh per financial year will now have two separate PF accounts. Finance Minister Nirmala Sitharaman had announced, in this year's budget, that PF contribution of more than Rs 2.5 lakh in a fiscal will be taxable

Who will pay or deduct the tax on that interest earned above 2.5 lakh contribution, when will the tax get paid if the interest itself does not get computed till November every year, and if there is to be a TDS on that interest then who will deduct TDS?

These details are not available from Income Tax government or CBDT.

From last 6 years the interest on Provident Fund is getting credited only around November December. The current government has made the interest crediting action as a "Diwali festival event" to be celebrated.