In the Union Budget, 1.2 lakh private workers have received a big setback. Now if they get more PF deducted then they may have to pay tax.
In the Union Budget 2021, 1.2 lakh private workers have suffered a major setback. Now if they get more PF deducted then they may have to pay tax. Finance minister Nirmala Sitharaman has imposed a cap on PF cuts in the budget. PF deduction above Rs 2.5 lakh will attract Income Tax.
EPFO: Check balance in PF account in this way, interest has not been credited, so complain here
According to the government, there are about 1.2 lakh PF subscribers who are getting more PF cuts. This number is just 0.3 percent in front of 4.5 crore members of EPFO. The government says that PF is made for workers and not for High Net Worth Individuals (HNIs) ie those who get fat wages. According to EPFO data, the PF Balance of one of these HNIs is 103 crores. After this, another HNI is worth 86 crores.
Tax Free instrument
Under Clauses 10 and 11 of the Provident Funds Act, 1925 (19 of 1925), interest on EPF is completely tax free. According to the government, it has been seen that some employees get more PF deductions and they are getting good interest. Voluntary PF cuts are more among those doing this. This move of the government will affect people with high-income salary, who get voluntary PF deducted for Tax Free instrument.
Exemption from EEE system
Let me tell you that EPF was an option which had the benefit of Exempt-Exempt-Exempt (EEE) system (along with Public Provident Fund). But in the budget this system was abolished. Only in this scheme was Cap that a person can contribute 12 percent of his basic income. In addition, he can contribute more to the Voluntary Provident Fund (VPF). Therefore, the total amount of contribution to EPF and VPF can be up to 100 percent of its basic salary.
Will not take interest
After the provision of the budget, if you invest Rs 3 lakh in 1 year, then the interest of up to Rs 2.5 lakh will not be taxable. According to EPF’s official website – epfindia.gov.in, in EPF account, an employee contributes 12 percent of his salary to the PF account, and the same amount is deposited by the employer. EPFO manages EPF and also allows subscribers to view EPF passbook online through their website. If you have forgotten the password of your epf passbook, then you can create a new password very easily.
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