Separate accounts within PFs to be maintained for taxation purpose

The Budget 2021-22 announced income tax on interest accrued on annual provident contributions above Rs 2,50,000 for non-govt employees and Rs 500,000 for govt employees

Separate accounts will be maintained within provident funds, including employees' provident fund (EPF), where interest is taxable above a threshold from the current financial year.

The Budget 2021-22 announced income tax on interest accrued on annual provident contributions above Rs 2,50,000 for non-government employees and Rs 5,00,000 for government employees.

To clear any ambiguity over its operation, the Central Board of Direct Taxes inserted rule 9D under the Income Tax Act. It specified that separate accounts within provident fund accounts will be maintained, segregating taxable and non-taxable contributions to PFs.

"This will provide a convenience of calculation to the taxpayers