Rejig wage structure to benefit from EPF rule change, say analysts

If employer contribution is low, get salary restructured to enjoy higher tax-free interest

Topics
Employees Provident Fund | EPF | Wages

Bindisha Sarang & Sanjay Kumar Singh  |  Mumbai/New Delhi 

Finance Minister (FM) Nirmala Sitharaman had announced in the Union Budget 2021-22 that interest earned on employees’ annual contribution to the Employee’s Provident Fund (EPF) exceeding Rs 2.5 lakh will be taxed from April 1, 2021. This provision of Finance Bill 2021, which was passed by the Lok Sabha on Tuesday, has been amended.

Now, the threshold of Rs 2.5 lakh has been hiked to Rs 5 lakh in cases where employees alone contribute to the provident fund (PF), and the employer does not. The rationale When a person contributes to the EPF, the employer makes an ...

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First Published: Thu, March 25 2021. 06:10 IST
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