Tax on EPF Interest: Budget 2021

  • In the Union Budget 2021, the government announced a decision to tax interest incomes on annual Employees’ Provident Fund (EPF) and Voluntary Provident Fund (VPF) contributions of over Rs 2.5 lakh.
  • It seeks to exclude high net-worth individuals (HNIs) from the benefit of high tax-free interest income on their large contributions and this will only be applicable to the employee’s share of provident fund and not the employers.

Need

  • So far, many people put huge sums of money annually towards EPF and earned interest income from it without having to pay any tax. An anomaly is created due to this.
  • The ....
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