Till now, EPF is credited in a single provident fund a/c, but Indian Government wishes to split epf a/c’s into 2 separate a/c’s.
As per Union Budget 2021, EPF Credit above 2.5 Lakh would be taxable. Especially, the employee contribution over and above 2.5 Lakh is subject to tax.
So Indian Government wishes to separate interest credit and pf contribution as two unique entities, so that interest earned on PF Contributions would be easily calculated for tax purposes.
Financial experts are unhappy on this decision as maintaining 2 a/c’s would be cumbersome, if this would be applied in the coming future.
Anyhow, as a citizen of India we should follow government regulations and if government imposes to apply this rule, we should follow the same steps. Do track the latest events and updates notifying by the government to be future-ready.
As-of-now, it is only a proposal and if this would come into effect, we should follow government guidelines. So keep updated on the latest events.
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