{"id":80720,"date":"2021-02-05T18:14:59","date_gmt":"2021-02-05T12:44:59","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=80720"},"modified":"2021-03-01T13:49:28","modified_gmt":"2021-03-01T08:19:28","slug":"budget-proposes-tax-on-epf-interest","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/budget-proposes-tax-on-epf-interest\/","title":{"rendered":"Budget proposes tax on EPF interest"},"content":{"rendered":"<p><strong>What is the News?<\/strong><\/p>\n<p>The government has proposed to make the interest earned on EPF contributions beyond \u20b92.5 lakh Taxable.<\/p>\n<p><strong>Why has this proposal been made?<\/strong><\/p>\n<ul>\n<li>The government has found instances where High Net Worth Individuals(HNIs) are contributing huge amounts to EPF. They are getting the benefit of tax exemption at all stages \u2014 contribution, interest accumulation, and withdrawal.\n<ul>\n<li><strong>Example: In 2018-19, \u20b962,500 crores were deposited into EPF accounts by HNIs.<\/strong> The largest EPF account has a \u20b9103 crore balance.<\/li>\n<\/ul>\n<\/li>\n<li>Hence, this proposal is aimed to exclude high net-worth individuals(HNIs) from the benefit of high tax-free interest income on their large contributions.<\/li>\n<\/ul>\n<p><strong>Employee Provident Fund(EPF) Scheme:<\/strong><\/p>\n<ul>\n<li>EPF is a social security scheme under the Employees&#8217; Provident Funds and Miscellaneous Provisions Act,1952<\/li>\n<li><strong>Managed by: <\/strong>The scheme is managed under the aegis of Employees&#8217; Provident Fund Organization (EPFO).<\/li>\n<li><strong>Coverage: <\/strong>EPF accounts are mandatory for employees earning up to \u20b915,000 a month in firms with over 20 workers.<\/li>\n<li><strong>Contribution: <\/strong>Under the scheme, an employee has to pay a 12% contribution towards the scheme. An equal contribution is paid by the employer. The employee gets a lump sum amount including self and employer&#8217;s contribution with interest on both on retirement.<\/li>\n<li><strong>Limit on Employer\u2019s Contribution: <\/strong>In Budget 2020, the government had capped the contributions by employers into funds EPF or the National Pension Scheme at \u20b97.5 lakh a year.\n<ul>\n<li>However, government, as well as private-sector employees, are allowed to make voluntary contributions over and above the statutory deductions into the general provident fund(GPF) or EPF respectively.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.thehindu.com\/news\/national\/123-lakh-high-net-worth-individuals-deposited-62500-crore-into-epf-accounts-in-2018-19\/article33753096.ece?homepage=true\"><strong>The Hindu<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is the News? The government has proposed to make the interest earned on EPF contributions beyond \u20b92.5 lakh Taxable. Why has this proposal been made? The government has found instances where High Net Worth Individuals(HNIs) are contributing huge amounts to EPF. They are getting the benefit of tax exemption at all stages \u2014 contribution,&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/budget-proposes-tax-on-epf-interest\/\">Continue reading <span class=\"screen-reader-text\">Budget proposes tax on EPF interest<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,9],"tags":[1308,1303],"class_list":["post-80720","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-public","tag-eco_0","tag-eco_8","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":1700811547,"cached_date":1704886370},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/80720","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=80720"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/80720\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=80720"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=80720"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=80720"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}