RBI Issues Circular On Levying Unfair Interest Charges On Customers
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The Budget announcement related to provident fund has generated quite a buzz and salaried professionals are concerned about its impact.
The decision to tax interest earned from provident fund contribution of over Rs 2.5 lakh a year is likely to affect only 0.23% of 45 million subscribers.
Around Rs 825 crore is deposited in the country’s top 20 PF accounts.
Retired Central Provident Fund Commissioner KK Jalan said the government’s move is a step in the right direction.
“These steps are in the right direction as there are a large number of accounts in the country which do not require tax-free interest from the government. Steps have been taken to fill a large gap of tax leakages through tax on EPF,: he told Money9.
Tax expert Gauri Chadha too supported the move.
“Employees who get fat salary packages and contribute more, have the ability to pay tax on the returns on them.” There is no harm in taxing them,” she said.
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