Those employed, whose voluntary provident fund deposits, including regular provident fund, live more than 2.5 lakh rupees a year, will get less returns from next year.
Those job occupation whose Voluntary Provident Fund deposits together with the regular provident fund is more than 2.5 lakh rupees in a year, they will get less returns from next year. The higher the PF contribution, the lower the return. This is because the government is going to tax the interest on PF. This will affect the returns of employees. However, the tax rate will remain the same except in cases where surcharge will be imposed. PF up to 2.5 lakh will get 8.5 percent return. The government will not impose tax on the interest received on it.
Those whose PF contribution is 36 to 48 lakh, their income is considered around 1 crore. Therefore, there will be 30 percent tax on interest. In addition, there will be 10 per surcharge. Whose PF countrybush is around 6 million. Their income could be around 1-2 crores. Whose interest will be taxed at 30 percent and surcharge will be 15. At the same time, interest on PF contribution of 1.20 crore will be 30 percent tax and 25 percent surcharge. Those whose PF contribution is around 2.5 crore will be charged 30 percent tax and 37 percent surcharge on their interest.
Explain that PF contribution of up to 2.5 lakh will get PF return of up to 8.5 percent. 3 percent at 8 lakh, 6.9 percent at 6 lakh, 6.4 percent at 12 lakh, 6.1 percent at 24 lakh, 5.7 percent at 36-48 lakh, 5.5 percent at 60 lakh, 5.2 percent at 1.20 crore and PF contribution of 2.5 crore 4.9 percent return.
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Explain that for the first time, the government has proposed to tax the PF of employees. In which contribution of more than 2.5 lakh rupees in one year will be taxed on interest. In the recent budget proposals, the government has proposed that there will be no tax exemption on interest on contributions to PF of more than Rs 2.5 lakh. This may be a cause of concern for PF holders. This will only affect those who contribute more than 2.5 lakh PF in a year.
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