What is the EPF interest rate for 2021 22?

8.5 percent
The Employees’ Provident Fund Organisation (EPFO) on October 29 got the approval from the Finance Ministry to pay an 8.5 percent interest rate to millions of its subscribers, and the pay-out for FY21 will be done within the next few days.

How is tax calculated on PF interest?

For an employee in the tax bracket of 30 per cent, the interest income on EPF contribution over Rs 2.5 lakh will get taxed at the marginal tax rate. If a person is contributing an amount over Rs 2.5 lakh, say Rs 3 lakh, in a financial year to the EPF scheme, interest will be earned at the rate of 8.5 per cent.

What is the EPF interest rate for 2020 21?

8.50 per cent
“The Ministry of Labour and Employment has conveyed the approval of the central government under para 60(1) of Employees’ Provident Fund Scheme, 1952 to credit interest at 8.50 per cent for the year 2020-21 to the account of each member of the EPF Scheme as per the provisions under Para 60 of EPF Scheme, 1952,” EPFO …

How much amount of PF is tax free?

If the contribution to Employees’ Provident Fund (EPF) and Voluntary Provident Fund (VPF) exceeds Rs 2.5 lakh in a financial year, the interest accrued on such excess contribution shall be taxable. In the case of government employees, the threshold limit is Rs 5 lakh.

What is current PF interest rate?

8.5\%
Government approves 8.5\% interest rate on EPF for fiscal year 2021. The EPF (Employees Provident Fund) interest rate provided for 2019-20 was the lowest since 2012-13, when it was brought down to 8.5 per cent.

Did EPF interest get credited?

On October 30, the government approved 8.5 per cent interest for EPF deposits for 2020-21, and the interest has started getting credited to subscribers’ accounts.

Is PPF interest taxable 2021?

Taxation status of PPF PPF comes under the Exempt-Exempt-Exempt (EEE) category of tax policy, which means the principal amount, maturity amount, as well as interest amount, is tax-free under PPF.

How will interest on PF contributions above Rs 2.5 lakh be taxed?

The new rule is that the interest earned on an employee’s contribution above Rs 2.5 lakh in a year will become taxable in the hands of the employee while for the government sector employees, the monetary ceiling shall be Rs 5 lakh.

Which month EPF interest will be credited for 2020-21?

The Employees’ Provident Fund Organisation (EPFO) has started crediting interest to Provident Fund (PF) accounts of its subscribers. On October 30, the government had approved 8.5 per cent interest for EPF deposits for 2020-21. The rate was the same for the 2019-2020 period.

Is PF return taxable?

The USP of the Employees’ Provident Fund (EPF), apart from safety and high returns (compared to other fixed income options such as PPF, FD), is that it has exempt-exempt-exempt tax status. That is, it is exempted from tax at the time of maturity.

How much of my PF contribution will be taxed?

Any individual contributing more than Rs 20,833 per month will get impacted as her own contribution will be higher than Rs 2.5 lakh. All individuals with a monthly basic salary of over Rs 1,73,608 will have PF contributions in excess of Rs 2.5 lakh in a year, and hence they will pay tax on interest earned on that excess amount.

What is the tax on PF contribution for FY22?

This means that if your annual contribution to PF in FY22 is Rs 10 lakh, the interest income on Rs 7.5 lakh will get taxed not only for FY22 but also for all subsequent years. If the PF contribution is the same for FY23, the tax will have be paid on interest income on Rs 15 lakh.

What are the rules for taxing interest earned on Provident Fund contributions?

The government has notified the rules for taxing the interest earned on provident fund contributions beyond a limit. What is the limit, how much will the tax be, and what is the objective of the move? EPF office in Chandigarh. Interest income will be taxed on EPF contributions over Rs 2.5 lakh (private) and Rs 5 lakh (government) in a year.

What will be the tax on PF contribution of 15 lakhs?

If the PF contribution is the same for FY23, the tax will have be paid on interest income on Rs 15 lakh. Also, if you earned interest of 8.5\% last year, and if you fall in the highest tax bracket, then the following year you will earn effectively around 5.85\% on the additional contribution (assuming the interest rate is unchanged).