12 April 2023
Effective 1 April 2022, any interest on an employee's contribution to EPF upto INR 2.5 lakhs per year is tax-free and any interest earned on a contribution over and above INR 2.5 lakhs is taxable in the hands of the employees. The threshold of INR 2.5 lakhs is increased to INR 5 lakhs in case the employer is not contributing towards EPF.
What about the taxability of interest earned on EMPLOYER Contribution?
As per my understanding, the new rules on taxability of interest on PF apply to the contributions made by the employee, while contributions made by the employer will not be taxed.
13 April 2023
Employer contribution to Provident Fund (PF), NPS and superannuation aggregating to Rs 7.5 lakh is tax exempt. Contributions beyond this limit, along with accretions (i.e., interest, dividend, etc.) on such excess contribution is now taxable as salary income effective from FY 2020-21.
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