 "Rejig wage structure to benefit from EPF rule change, say analysts")
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 equivalent contribution. From the government’s
