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  • Category: Miscellaneous

    Attention! Provident Fund Account will be split into two from 1st April 2022

    This has been announced by the Finance Minister, Ms. Nirmala Sitharaman. Provident Fund contribution of more than Rs. 2.5 lakh in a fiscal year will now be taxable. Those subscribers of Employees' Provident Fund (EPF) and Voluntary Provident Fund (VPF), who have PF contributions of over Rs 2.5 lakh per financial year, will now have two separate PF accounts. These rules will be effective from 1st April 2022.

    I would like to know whether the existing Provident Fund Account will be automatically split, or the subscribers will have to apply for splitting up of the existing PF Account, separately. What are the paperwork involved in this regard? When should the subscriber apply and to whom?

    Kindly furnish the details in this regard.

    (I tried to post the question in 'Ask Expert' section, but my entry has been restricted in that Section, because I have two pending questions.)
  • #753572
    This information I read in newspapers. The news says that this will be implemented from April 2022. The existing PF accounts whose PF amount is more than 2.5 lakhs will automatically get into two accounts. The individual need not do anything. The PF office will give the guidelines to the organisation on the way in which they have to submit the PF details of their employees. The employees whose contribution per annum is less than 2.5 lakhs will have only one account. But the other people will have two accounts. The amounts deposited in the PF account over and above 2.5 lakhs will get deposited in that account. A new section 9D is introduced under IT rules and this section will have all the rules and regulations related to income tax on PF and its modalities. A low or medium salary person will not have any impact. The money that is already is there in the PF account will be placed in the first account where there is no tax on that money.
    drrao
    always confident

  • #753573
    According to the latest information, the private or the govt employee who has been contributing to the PF and over above the said limit of 2.5 lakh what ever the interest incomes earned, would be henceforth taxable. The IT department would keep vigil on all the EPF account which has already touched the 2.5 lakh limit and as and when the interest are announced, that is going to be taxed. Though the govt intention wants to tax the high income group to part with income tax for the benefits they got. This move will surely be opposed because the EPF is deducted from our hard earned pay and it is retained by the govt and ploughing back the same in various projects to which we are eligible for the interest and now that would be taxed and therefore the very purpose of saving in EPF is defeated and people would withdraw for one reason or other.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease

  • #753574
    I want to know whether the existing Provident Fund Account will be automatically split, or the subscribers will have to apply for splitting up of the existing PF Account, separately. What are the paperwork involved in this regard? When should the subscriber apply for splitting up of the PF Account and to whom?
    “Khamosh rahoon toh mushkil hain, keh doon toh shikayat hoti hain" (It is difficult to remain silent; But if I speak, they complain.) --------- Saba Afghani

  • #753575
    The existing provident fund account would be automatically split and it would come under the purview of CBTD and therefore time has been been taken to rejig the process.
    K Mohan
    'Idhuvum Kadandhu Pogum "
    Even this challenging situation would ease


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