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Home / Business News / With the tax on EPF, how safe are your investments?

With the tax on EPF, how safe are your investments?

How safe are your investment and pension funds after the government proposed to tax employee provident fund?

business Updated: Mar 02, 2016, 15:01 IST
Suchetana Ray
Suchetana Ray
Hindustan Times
At present, withdrawal from EPF is entirely tax-free.
At present, withdrawal from EPF is entirely tax-free.(Representative image)

With the government proposing to tax the interest accrued on 60% of employee provident fund, this is how your investments are impacted:

Employee Provident Fund: Interest accrued on 60% of the corpus will be taxed during withdrawal. But the tax is applicable only on deposits made after April 1, 2016.

Investment: No tax

Withdrawal: Tax on interest earned on 60% of the corpus.

Condition: The tax on the interest is applicable on those earning salaries above Rs 15, 000 per month.

Read: In defence of EPF tax: Govt not afraid of taking on moneybags

National Pension Scheme: 60% of the corpus will be taxed on withdrawal.

Investment: No Tax

Withdrawal : Tax on 60% of the corpus

Condition: Corpus fully taxable till March 31, 2016

Employer managed pension funds: Just like EPF, interest accrued on 60% of the corpus will taxed on withdarwal. On this as well, this tax is applicable from April 1, 2016.

Investment: No tax

Withdrawal: Tax on interest earned on 60% of the corpus.

Condition: The tax on the interest is applicable on those earning salaries above Rs 15, 000 per month.

Superannuation funds managed by employers: 60% of the corpus will be taxed on withdrawal.

Investment: No Tax

Withdrawal : Tax on 60% of the corpus

Condition: Corpus fully taxable till March 31, 2016

Read: #epfnotax: Petition to withdraw EPF tax gets 4,631 signatures on day 1

PPF & NSC: Public Provident Fund and other small savings schemes like the National Savings Certificate remain tax free.

Investment: No tax

Withdrawal: No tax

Condition: Investments of only Rs 1,50,000 can be made per year.

Pension funds offered by LIC and other private companies: These schemes continue to remain tax-free, if designed under section 80C

Investment: No tax

Withdrawal: No tax

Condition: Interest accrued and bonuses, if applicable, are also not taxable

Read: Only EPF interest to attract tax, withdrawals will be exempted

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