What is the maximum PF contribution by employer?
Employers contribute towards their Employees’ Provident Fund (EPF) at the rate of 12\% of the basic salary from which 8.33\% of their individual monthly salaries goes into the Employees’ Pension Scheme (EPS). However, this contribution cannot exceed Rs 1,250 i.e. 8.33\% of Rs. 15,000 per month in the EPS Scheme.
What is the exemption limit for PF?
₹5 lakh
As per the notification, issued on August 31, contributions above ₹2.5 lakh in the Employee Provident Fund (EPF) per year will be taxed. In cases where there is no employer contribution in the EPF account, the threshold will be ₹5 lakh a year.
What is PF EEE?
At present, deposits in EPF fall under the EEE (Exempt, Exempt, Exempt) tax category. It means an employee is not liable to pay tax at all three levels – investment, earning and withdrawal.
Is EPF under EEE?
EPF investment comes under the category of Exempt, Exempt, Exempt (EEE) with regards to tax. It enjoys the EEE status as contributions are deductible from income. No tax is applicable on the amount of money you invest, the interest you earn or the amount you withdraw at the end of its maturity.
Can employer contribute more than 12 PF?
Yes. According to the current EPF rules, an employer also has to contribute to his/her employee’s account. An employer has to contribute 12 percent of salary of an employee. (Salary here is basic plus dearness allowance and retaining allowance.)
Can employee contribute more than 12\% to PF?
Voluntary Provident Fund (VPF) aka Voluntary Retirement Fund is the voluntary fund contribution from the employee towards his provident fund account. This contribution is beyond the 12\% of contribution by an employee towards his EPF. The maximum contribution is up to 100\% of his Basic Salary and Dearness Allowance.
Is employer contribution to PF taxable?
Excess contribution above 12\% of the salary by the employer was taxable. Accordingly, employer’s contribution to Provident Fund, National Pension Scheme (NPS) and Superannuation Fund in excess of Rs. 7.5 lakh will be taxable as perquisites in the hands of the employee.
Is PF mandatory for salary below 15000?
Employees Provident Fund (EPF) is a retirement saving option that is specially meant for the long term. EPF deduction is mandatory for employees who draw a salary less than Rs 15,000, but others can opt-out of this scheme through a declaration made in Form 11 of EPFO.
Can employer contribute more than 12 for PF?
The EPFO allows an EPF or PF account holder to opt for the VPF and invest beyond 12 per cent of its basic salary in one’s provident fund account. However, for this VPF contribution made by the employee, the employer will not contribute any additional amount.
Is employer contribution to provident fund taxable?
Is employer contribution to PF included in CTC?
Employer PF is part of CTC not shown on Salary Slip. It is NOT counted as part of your earnings and hence not taxed.
Why employer contribution is less in PF?
The money contributed by an employer goes towards different schemes. Of the basic salary, about 3.67\% goes towards EPF or for investments, and 8.33\% goes towards Employee Pension Scheme (EPS). If your basic salary is ₹30,000, the employer’s contribution for EPS will be ₹1,250 a month.
What is Employee Provident Fund (EPF) contribution?
As mentioned above, both employer and employee have an equal contribution towards the employee provident fund. The actual amount to EPF contribution is calculated based on the employee’s basic salary and dearness allowance. For most employees, the PF contribution is 12\% of the basic salary.
What percentage of employer’s share of Provident Fund goes towards pension?
8.33\% from the employer’s share of Provident Fund contributions of the total salaries that is limited to Rs. 15,000 each month is sectioned and contributed towards the Employees’ Pension Fund.
Is there any investment with EEE status without any threshold limit?
An Investment with EEE status that too without any threshold limit is a goldmine for the taxpayer but a landmine for the revenue. Possibly, contribution to employee provident fund is the only investment which has a EEE status without any threshold limit.
What is the maximum amount of tax-free interest earned on Provident Fund?
The Government had capped the tax-free interest earned on provident fund contribution by employees to a maximum of Rs. 2.5 lakh in a year vide Budget 2021-22. 1.1 Section 10 (11) and 10 (12) of the Income Tax Act provides an exemption for the statutory provident fund and recognized provident fund respectively.