Tax-Free Provident Fund Limit May Be Raised To Rs 5 Lakh: Report
The government may double the limit for tax-free contributions in provident fund for all salaried employees to up to Rs 5 lakh per annum in the forthcoming union budget 2022-23, a report has said, in order to bring them at par with government employees.
Though the government had in the last union budget for 2021-22 announced capping of tax-free annual provident fund (PF) contributions to Rs 2.5 lakh for availing tax-free interest income, the limit was later raised to Rs 5 lakh for those funds where employers don’t contribute. The limit was raised by amending the finance bill.
However this change benefitted only a small section of top government officials, who contribute higher amounts in general PF.
Now, according to a report in The Hindustan Times, the government may raise the limit to Rs 5 lakh per annum for all salaried employees.
According to the report, the government has received several representations towards enabling this provision. These representations basically stressed on the point that since the provision benefitted only government employees, it should be non-discriminatory and all salaried employees should be brought under its ambit.