Millions of PF account holders got a bounty of 9.5% interest for the year 2010-11. However there was a lack of clarity on the taxability of the Interest over 8.5% as the finance ministry had notified a interest exemption on PF deposits @8.5%.
In its notification No. 24/2011 dated 13th May,2011, the ministry of finance has revised the rate of interest notified under rule 6(b) of Part A of IVth Schedule to the Income tax act,1961 to 9.5%.
This clears the way of tax exemption on Interest Income from PF deposits @9.5% for the financial year 2010-11.
20 comments:
pf for sure is a great saving option but an interest rate of 9.5 percent has made it a reasonable investment option as well
Is there any limit on maxium investment that a person can do in VPF ? My company allows me to opt for VPF(Voluntary provident fund) as much as 96% of my basic salary. Will I get income tax free interest for whole amount of VPF and the empoyer contribution of PF.
Hi Anonumous,
You can contribute 100% of your basic towards VPF. Yes, you would enjoy all the benefits that you enjoy for normal PF contribution except that you would NOT receive matching contribution from your employee on your VPF contributions.
Definitely it's a reasonable investment option. Can anybody pls post some more detailed information on it??
Ya , Even i have plannned to invest in PPF so that i can reduce my taxable amount
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In 2011, companies used to add the amount of money as PF. For example, if Rs 1200 is deducted from the employee's salary as PF, then RS 1200 is added by company also to make it Rs 2400 in employee's PF. But I have heard, companies are no more adding from their side. If a person wants PF, the total Rs 2400 is deducted from his salary.
Is it true??
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EPFO can provide higher returns in the current fiscal as the government has increased interest rate on Special Deposit Scheme (SDS) 1975 to 8.6 per cent from 8 per cent with effect from December 1, 2011.
good news for every indian.
Awesome…
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You can contribute 100% of your basic towards VPF. Yes, you would enjoy all the benefits that you enjoy for normal PF contribution except that you would NOT receive matching contribution from your employee on your VPF contributions.Thanks......
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This is good news. For both new investors and those who have a PPF a/c for some years now and a significant accumulated balance.This makes the PPF,which is already one of the best avenues for investment in terms of rik,returns and tax effeciency,even more attractive.
You can contribute 100% of your basic towards VPF. Yes, you would enjoy all the benefits that you enjoy for normal PF contribution except that you would NOT receive matching contribution from your employee on your VPF contributions.
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