Explained: New rules of taxing interest on EPF

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If you contribute more than Rs 2.5 lakhs annually to the Employee Provident Fund (EPF), then be ready to pay tax. The Budget of 2021 has imposed a tax on EPF of the Exempt-Exempt-Exempt (EEE) category. But this tax will not apply to everyone. Interest earned on PF contribution above Rs 2.5 lakh will be taxable. Under the new rules of the Central Board of Direct Taxes (CBDT), the EPF account will have two parts. A taxable portion in which contributions above Rs 2.5 lakh will be accounted for and the interest earned thereon will be taxed. The second non-taxable part where investment up to 2.5 lakh will be recorded in EPF.

Watch the full video to know more about the new rule of EPF