Budget Govt may raise tax-free PF contribution limit to Rs 5 lakh for all salaried employees: Report
New Delhi/IBNS: In good news for salaried employees, the government may double the limit for tax-free contribution to the provident fund for salaried employees up to Rs 5 lakh per annum in the forthcoming Union budget 2022-23, in order to bring them at par with government employees.
Earlier, the government had raised the cap of tax-free annual provident fund contributions for availing tax-free interest income from Rs 2.5 lakh, stipulated in the union budget 2021-22, to Rs 5 lakh for those funds where employer's don't make contributions, by amending the finance bill.
However, this helped only a small section of government employees, mostly in higher ranks, who make higher contributions to General Provident Fund (GPF), a facility available only for government employees.
Now, the government may raise the limit to Rs 5 lakh per annum for all salaried employees, following representations by several tax experts, according to Hindustan Times.
According to the representations, the government should extend the 5 lakh cap for salaried employees to benefit all salaried employees as enabling this provision only for government employees is discriminatory.
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