Should You contribute more than 2.5 lakhs to your PF after 1st April 21?
Contribution to Provident fund post April 2021...To Be or not To Be...? The Provident Fund has always been a hot favourite with employees. For many years now, given the tax benefits at the time of contribution, tax free interest and then tax free at the time of withdrawal(EEE), "The Provident Fund" enjoys almost a cult like status. It's an integral part of the family finances; familiar, stable, assured and something that is akin to mecca for investors! Given the affinity to this investment instrument, it is not surprising that for many investors, it was a great setback when The Union Budget 2021 proposed taxing the interest on Provident Fund contributions of over Rs. 2.5 lakh a year. As per clause 5 of the Finance bill 2021, the interest on ay contribution above Rs. 2.5 lakh by an employee to a recognized Provident fund will be taxable from 1st April 2021. In the absence on clarity, confusion prevailed as many investors were left wondering what this was all about. The