Provident fund taxability

Till last year, I added 150000 to my PPF account, irrespective of contribution from my salary. So, I used to get benefit on only 150000, and the rest was taxable. But interest from 150000 in PPF and that in EPF was non-taxable.

Is it still applicable this year? Or, if my total contribution (PPF + EPF) exceeds 150000, interest over the surplus will be taxable?

Hey @ztvusbqpvrco, you can still avail the deduction of INR 1,50,000 if you file your ITR under the old tax regime. But, if you opt to file your return under the new tax regime, you will not be able to receive the deduction under section 80C. You can read this article for more details:

Hello @Maharshi_Shah, thanks for replying.

Not sure if I failed to explain myself, but I am not asking about 80C deduction. My question is regarding the new announcements regarding PF rule changes that happened in last April.

I know that my contribution (PPF+EPF) can get at most 1.5L deduction, and rest is taxable. Iā€™m ok with that. Iā€™m asking regarding taxability of the interest earned on those.

Hey @ztvusbqpvrco, as per the new rule, starting from the 1st of April of this year, the interest on employee contributions to PF of over INR 2.5L will be taxed. Therefore, the amount up to INR 2.5L is the deposit limit on which the interest earned is tax-exempt. Also, another important part to this announcement is that the government had later increased the limit on taxation of interest to INR 5L, but, only in cases where the employer is not making any contribution to the fund. I hope this resolves your query.

This definitely does. Thank you

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