Explorer

Modi Govt Notifies New IT Rules To Bifurcate PF Accounts - All You Need To Know

The decision has been taken to operationalise a new tax on PF income from employee contributions exceeding Rs 2.5 lakh annually.

New Delhi: Prime Minister Narendra Modi-led government has notified new income tax rules under which the existing Provident Fund (PF) accounts will be split into two separate accounts.

The decision has been taken to operationalise a new tax on PF income from employee contributions exceeding Rs 2.5 lakh annually.

READ: Broadband Bills Will Come Down To Half For Rural Users If Modi Govt Accepts This TRAI Recommendation

 The Union Finance Ministry notified the Income Tax department regarding the same on August 31. 

The Central Board of Direct Taxes (CBDT) has issued the rules and separate accounts within the PF account shall be maintained.

“For the purpose of calculation of taxable interest…, separate accounts within the provident fund account shall be maintained during the previous year 2021-2022 and all subsequent previous years for taxable contribution and non-taxable contribution made by a person,” as per the Income-Tax (25th Amendment) Rules, 2021.

All existing employees provident fund (EPF) accounts will subsequently be divided into taxable and non-taxable contribution accounts.

The non-taxable accounts will include their closing account as it stood on March 31, 2021.

ALSO READ: RBI Imposes Rs 25 Lakh Fine On Axis Bank Over Non-Compliance Of Norms

It was announced in the Union Budget 2021 that interest on Employees’ Provident Fund (EPF) and Voluntary Provident Fund (VPF) contributions above Rs 2.5 lakh in a financial year will be taxable.

Announcing the same in the budget, Union Finance Minister Nirmala Sitharaman had argued that some employees were contributing huge amounts into their PF accounts and getting tax-free incomes.

View More
Advertisement

IPL Auction 2025

Most Expensive Players In The Squad
Virat Kohli
₹21 CR
Josh Hazlewood
₹12.50 CR
Phil Salt
₹11.50 CR
View all
Most Expensive Players In The Squad
Rishabh Pant
₹27 CR
Nicholas Pooran
₹21 CR
Ravi Bishnoi
₹11 CR
View all
Most Expensive Players In The Squad
Jasprit Bumrah
₹18 CR
Suryakumar Yadav
₹16.35 CR
Hardik Pandya
₹16.35 CR
View all
Most Expensive Players In The Squad
Heinrich Klaasen
₹23 CR
Pat Cummins
₹18 CR
Abhishek Sharma
₹14 CR
View all
Most Expensive Players In The Squad
Ruturaj Gaikwad
₹18 CR
Ravindra Jadeja
₹18 CR
Matheesha Pathirana
₹13 CR
View all
Most Expensive Players In The Squad
Shreyas Iyer
₹26.75 CR
Arshdeep Singh
₹18 CR
Yuzvendra Chahal
₹18 CR
View all
Most Expensive Players In The Squad
Sanju Samson
₹18 CR
Yashaswi Jaiswal
₹18 CR
Riyan Parag
₹14 CR
View all
Most Expensive Players In The Squad
Venkatesh Iyer
₹23.75 CR
Rinku Singh
₹13 CR
Varun Chakaravarthy
₹12 CR
View all
Most Expensive Players In The Squad
Rashid Khan
₹18 CR
Shubman Gill
₹16.50 CR
Jos Buttler
₹15.75 CR
View all
Most Expensive Players In The Squad
Axar Patel
₹16.50 CR
KL Rahul
₹14 CR
Kuldeep Yadav
₹13.25 CR
View all
Advertisement
25°C
New Delhi
Rain: 100mm
Humidity: 97%
Wind: WNW 47km/h
See Today's Weather
powered by
Accu Weather
Advertisement

Top Headlines

Bangladesh: 1 Dead, 10 Injured As Clash Breaks Out In Chattogram Court Area After Chinmoy Das’s Arrest
Bangladesh: 1 Dead, 10 Injured As Clash Breaks Out In Chattogram Court Area After Chinmoy Das’s Arrest
‘Tried To Be Within Maryaada, Didn’t Do Any Encroachment’: PM Modi Quips At Supreme Court Constitution Day Event
‘Tried To Be Within Maryaada, Didn’t Do Any Encroachment’: PM Modi Quips At Constitution Day Event
Shiv Sena Leaders Met Ajit Pawar's NCP Faction To Seek Support For Eknath Shinde For CM's Chair
Shiv Sena Leaders Met Ajit Pawar's NCP Faction To Seek Support For Eknath Shinde For CM's Chair
Jhansi: Dhirendra Shastri Responds To Reports Of Attack On Him After Video Shows Mobile Phone Hitting His Face
Dhirendra Shastri Responds To Reports Of Attack On Him After Video Shows Mobile Phone Hitting His Face
Advertisement
ABP Premium

Videos

FIR Filed Against Sambhal MP Ziaur Rahman, Statement Released Amidst ControversyFIR Filed Against Sambhal MP Ziaur Rahman and Local MLA's Son in Controversial CaseSambhal Violence Sparks Political Firestorm, Congress MP Imran Masood's Strong Remarks | ABP NewsBreaking News: SP Leader Ram Gopal Yadav Reacts to Sambhal Violence | ABP News

Photo Gallery

Embed widget