The Central Board of Direct Taxes has released the Income-tax (25th Amendment) Rules, 2021 to further make amendments to the Income-tax Rules, 1962. As such, after Rule 9C, a new rule 9D has been inserted which lays down provisions for Calculation of Taxable Interest Relating to Contribution in a Provident Fund or Recognised Provident Fund, Exceeding the Specified Limit.
Relevant text of the new Rule is as follows
“9D. Calculation of taxable interest relating to contribution in a provident fund or recognised provided fund, exceeding specified limit.- (1)For the purposes of the first and second provisos to clauses (11) and (12) of section 10, income by way of interest accrued during the previous year which is not exempt from inclusion in the total income of a person under the said clauses (hereinafter in this rule referred to as the taxable interest), shall be computed as the interest accrued during the previous year in the taxable contribution account.
(2) For the purpose of calculation of taxable interest under sub-rule (1), separate accounts within the provident fund account shall be maintained during the previous year 2021-2022 and all subsequent previous years for taxable contribution and non-taxable contribution made by a person.
Click here to read the official notification.
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