The Finance Ministry defends EPF’s tax-free thresholds enabling government employees to have a tax-free threshold. This limit or threshold is 5 lakh for Provident Fund contributions.
However, for private-sector jobs, employees having investments above 2.5 lakhs in PPF will be under taxation. This taxation system will begin this year.
Therefore, In this article, we will discuss this news in detail. We will also understand EPF Registration and its benefits.
Finance Ministry defend EPF’s tax-free thresholds?
Revenue Secretary Tarun Bajaj clarifies that people may contribute in two ways: By the employer plus By the employee. When both contribute, the employer’s contribution is exempt from 7.5 lakh, and the employee’s contribution is exempt from 2.5 lakh. As a result, the overall threshold for private-sector workers is 10 lakh rupees.
Some experts point out that EPF contributions in excess of 1.5 lakh will be taxed at the contribution level.
Is there any plan to raise the threshold for PF considering the inflation?
When asked if the government plans to raise the taxation threshold for PF contributions on the basis of inflation levels in the coming years, the government authority said, “Let’s see, Only the future will tell.”
Acknowledge the EPF
Employees contribute 12% of their base wage + DA to the EPF, a government scheme. The employer also pays equally to administrative costs, plus an extra 1.36 per cent.
It is mandatory for all the workers with a salary of less than or equal to fifteen thousand rupees.
This government scheme provides many benefits, and to avail of the benefits, organizations need to apply for EPF registration. Some significant advantages of EPF Registration are as follows.
- EPF helps you in savings.
- It isn’t compulsory to make a one-time lump sum investment.
- EPF or PF is a financial backup when you are jobless.
- It offers a great interest rate comparing to other investment schemes.
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