Government has raised the limit for tax exemption on interest earned on provident fund contributions by employees to 5 lakh per annum in specified cases as against 2.5 lakh rupees proposed in the Budget. 2021-21.
- Replying to a discussion on the Finance Bill 2021 in Lok Sabha, Finance Minister Nirmala Sitharaman made this announcement.
- She said the tax-free limit is now being amended to a maximum of 5 lakh rupees per annum.
- This exemption, however, is subject to the condition that up to Rs 5 lakh contribution does not include employer’s contribution beyond the statutory limit of up to 12 per cent of the basic pay.
