New EPFO tax rules apply to 60 lakh people earning about 15k per month!

March 01, 2016 15:54

ANI reports: Govt issues clarification about changes made in the tax treatment for recognized provident fund and national pension system.

Main category of people for whom EPF scheme was created are members of EPFO who are within statutory wage limit of Rs 15,000 per month.

Out of around 3.7 crore contributing members of EPFO as on today, around 3 crore subscribers are in this category, no change for them.

In EPFO, there are about 60 lakh contributing members who accepted EPF voluntarily and are highly-paid private sector employees. For this category (highly-paid private sector) of people, amount at present can be withdrawn without any tax liability. We are changing this.

What we are saying is that such employee can withdraw without tax liability provided he contributes 60% in annuity product. There are no monetary ceilings on employer contribution under EPF; only ceiling being that it would be 12% of salary of employee member.

Image: Jayant Sinha, MoS Finance

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