Is interest on EPF taxable?

High income earners with contributions of over Rs 2.5 lakh per year towards their Employees' Provident Fund (EPF) are liable to pay taxes on interest incomes if contributions are made over this amount.18-Jul-2022

Do we need to show EPF interest in ITR?

Synopsis. Budget 2021 announced that if an employee's own contribution in the EPF account exceeds Rs 2.5 lakh in the financial year, the interest earned on excess contribution will be taxable. The new rule is effective from April 1, 2021 (i.e., FY 2021-22).26-Jul-2022

How much EPF is exempt from Income Tax?

Here are the ten points that you need to know about EPF: Any interest on contributions made towards EPF of an employee only remains tax-free for contributions of up to ₹ 2.5 lakh a year. Interest on contributions of over ₹ 2.5 lakh is taxed from the employee yearly.17-Jul-2022

Is EPF investment tax-free?

Thus, if an employee's own contribution via EPF and VPF exceeds Rs 2.5 lakh in a financial year, then the interest earned on the excess amount will be taxable in the hands of an individual.22-Jul-2022

How to calculate tax on EPF interest?

Any interest credited to the provident fund account above 2.5 lakhs is taxable. Such interest will be taxable under the head Income from Other sources and not under the head salaries. TDS @ 10% u/s 194A will be deducted from the interest amount by EPFO.14-Apr-2022

Is EPF interest exempt?

With an amendment in the Finance Act, 2021, interest earned on a provident fund (PF) balance has come under the ambit of tax. This has been effective from April 1, 2022. Before the amendment, the interest earned on a PF balance was fully exempt from tax under Section 10 of the Income-Tax Act, 1961.03-Aug-2022

Is EPF maturity amount taxable?

As per the provisions of the Income-Tax (I-T) Act, 1961, the accumulated balance in EPF that is payable to an employee is excluded from the computation of the total income, in case certain conditions are met. This means the withdrawal is exempt from tax and the individual need not show the same in the return as income.12-Apr-2022

What is section 10 of Income-Tax?

[As amended by Finance Act, 2022] TAX-FREE INCOMES. Agricultural Income [Section 10(1)] As per section 10(1), agricultural income earned by the taxpayer in India is exempt from tax. Agricultural income is defined under section 2(1A) of the Income-tax Act.

How can I save my income tax?

Under Section 80C, save tax on the premium paid on insurance policies. Under Section 10(10D), maturity/death benefits are tax-free subject to the conditions mentioned therein. Under Section 80D, avail tax benefit# on the premium paid towards critical illness benefit offered by term insurance plans.

Is EPF withdrawal taxable after 5 years?

If you can defer withdrawing funds from your account for five years (continuous service with all employers), withdrawals thereafter will not attract any TDS. If withdrawal amount is less than Rs 50,000, no TDS is deducted.13-Jan-2022

How is taxable income calculated?

What are the steps to determine slab of your taxable income in India? Calculate your gross salary by adding Dearness Allowance, House Rent Allowance, Transport Allowance, Special Allowance to your basic pay. Then deduct the exemptions of HRA, professional tax and standard deduction from the gross salary.03-Dec-2021

Who will deduct TDS on PF interest?

It will be applicable to all EPF members including members of exempted establishments/exempted trusts. The TDS will be applicable even in the case of death where the EPF member has made EPF contributions exceeding Rs 2.5 lakh in a financial year. Further, it will be applicable to international workers as well.08-Apr-2022

What is tax free income?

Tax-free is used to describe income on which you do not have to pay tax.

What is Section 10 12 of Income Tax?

Section 10(11) and Section 10(12) fully exempted interest accrued on the contribution made by the employee to the 'Recognized Provident Fund' and 'Statutory Provident Fund'. Interest accrued, during the previous year, under the 'Recognized Provident Fund' and 'Statutory Provident Fund' extends the exemption limit.

Is PF withdrawal taxable after 10 years?

However, if you withdraw before 10 years, then the entire amount withdrawn by you becomes taxable. However, if you withdraw it on retirement, the entire amount will not get taxable.

What is exemption under section 10 & 17 in income tax?

Section 10 of the Income Tax Act covers many allowances such as Leave Travel Allowance, Uniform Allowance, Travelling Allowance, House Rent Allowance and some more. However, some special allowances that are exempt fall under Section 10 (14).

What is the maximum exemption under section 10?

Section 10 (10C) VRS Compensation Under the voluntary retirement scheme, the compensation that is received at the time of retirement is exempted to a maximum limit of INR 5 lakhs.

What is the exemption under section 10?

Section 10 (10C) – Voluntary Retirement Scheme The amount an individual receives on his voluntary retirement or termination of his service under voluntary retirement scheme is exempt. Here, the individual must be an employee of any of the following: a public sector company, any other company.

How can I pay zero tax upto 15 lakhs?

1. Reduce Your Taxable Income by Up To Rs 1.5 Lakhs (Section 80C, 80CCC, 80CCD)

Unit Linked Insurance Plans (ULIPs)
Pension or Annuity Plans from Life Insurance Companies.
Public Provident Fund (PPF) & Employee Provident Fund (EPF)
New Pension Scheme Tier-I Account.
Senior Citizen Savings Scheme.

What is the tax on 9 lakhs?

The finance minister announced that individuals with an annual income between Rs 5 lakh and Rs 7.5 lakh would pay 10% tax, and those earning Rs 7.5 lakh to Rs 10 lakh 15%. Under the old regime, with deductions, these individuals pay 20% income tax.