CA Student
6149 Points
Joined March 2009
@ Madina:
Please note that the rate of interest on PF balance is now 9.5%. If it exceeds beyond that it is taxable. Please refer RTP for the same. Before this, there was a notification saying 8.5% rate of interest w.e.f. Sep 1, 2010, beyond which is taxable. But this now superceded by 9.5% rate of interest.
The implication of this amendment as on today stands as below:
If an employer credits interest @ 10% for the PY 2010-11 to the balance standing in the account of employee, then excess interest i.e.0.5% (10% - 9.5%) would be included in the total income of the employee for that year. Hence, there is no point of 8.5% rate now. Throughout the year 9.5% is applicable now as per latest amendment. Beyond which is taxable. Mr Rishi kindly observe the latest amendment.