In the budget the government has made important announcements for many sectors. Such announcements were made in healthcare starting from agriculture, which will benefit the common man as well as the sector. In this way, people are not given any exemption in income tax, but an important decision was definitely made about the provident fund of the people who are employed. Finance Minister Nirmala Sitharaman announced that if the companies their timely EmployeeThey will not get benefit if they do not deposit their PF.
Retired Enforcement Officer Bhanu Pratap Sharma said that if CompanyIf the employees do not submit the PF by the 18th of the month, they will be fined. So, PF depositors before the 18th date are exempted from the government. Now the government has abolished this exemption. In fact, the government’s intention is that no employee should face any hardship because of the company.
How fine it feels
Under Section 7Q a penalty of 12% per annum is payable. These penalties are levied after the daily deadline. In fact, delays in companies cause employees to be hit twice. One, their PF is deposited late. So, employees also have to bear the loss of interest due to late submission.
- 5% penalty on delays up to two months
- 10% penalty for 2-4 months delay
- 15% penalty for 4-6 months delay
- 25% penalty for delays of more than 6 months
Investors also felt the tweak
An announcement has also been made in the budget along with the companies in which the employees have also felt a shock. Nirmala announced to Sitaram that now investing up to Rs 1.5 lakh in the financial year will get the benefit of tax exemption. This means that if you have invested more than that, then the interest earned will be tax deductible. Currently the interest rate on PF is 8 per cent and interest income is completely tax free.
The new rule will take effect on April 1
This rule will come into force from April 1, 2021. Under the new rule, if the contributor has invested more than Rs 2.5 lakh per annum in PF, the income from interest on the additional investment will be taxable. It is to be mentioned that there is a tax benefit on the investment of Provident Fund, NPS. The underlying investment falls under Section 80C. Apart from this, interest income and withdrawals are also completely tax free. Asked at a post-budget press conference, he said the rule would affect a maximum of 1 per cent EPF contributors.