Tax-Free Provident Fund Limit May Be Raised To Rs 5 Lakh: Report

Government could elevate the tax-free provident fund restrict within the forthcoming funds

The authorities could double the restrict for tax-free contributions in provident fund for all salaried workers to as much as Rs 5 lakh each year within the forthcoming union funds 2022-23, a report has stated, with the intention to convey them at par with authorities workers.

Though the federal government had within the final union funds for 2021-22 introduced capping of tax-free annual provident fund (PF) contributions to Rs 2.5 lakh for availing tax-free curiosity revenue, the restrict was later raised to Rs 5 lakh for these funds the place employers do not contribute. The restrict was raised by amending the finance invoice.

However this alteration benefitted solely a small part of prime authorities officers, who contribute increased quantities on the whole PF. 

Now, based on a report in The Hindustan Times, the federal government could elevate the restrict to Rs 5 lakh each year for all salaried workers.

According to the report, the federal government has acquired a number of representations in the direction of enabling this provision. These representations principally careworn on the purpose that because the provision benefitted solely authorities workers, it must be non-discriminatory and all salaried workers must be introduced underneath its ambit.

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