Good news after Good news, for EPF subscribers. After announcing that the interest rate on PF will be increased from 8.5% to 9.5%, the Government has now announced that there will be 100% tax concession on the amount employees’ earn from their PF accounts.
While this was the case till August 2010 where amount contributed to PF account and interest earned used to get 100% tax benefit (until and unless the interest rate was below 12%), this law was abolished then when it was decided that from September 2010, 100% tax benefit will only apply if the interest rate is 8.5%. This new ruling was in existent till this moment, but not any more.
In other related news, the Union Government has hinted that there might be further increase in the interest rate paid to PF holders. The current rate of 9.5% could be increased even more, if the words of Minister of Labour and Employment, Mallikarjun Kharge, are any indications. He says that the Government always wishes to provide more benefits to the employees.
As said earlier, as long as this new increase (when ever that happens) in interest rate is below 12%, you will continue to receive 100% tax benefits.