PF & income tax, connection

Ask the Community Payroll
1

Hello everyone,

I have questions on PF and IT.

Is PF directly linked to income tax? In what ways?
Are there any recent changes in the ways they are connected?

Please advise.

Regards.

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2

Hi Ann,

This article seems like a good guide on this topic. Check if it helps.

Regards,
Jyoti

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3

Hi @Anisha

Usually PF helps in IT exemption. I.e the amount you remit towards PF is clubbed along with 80C and helps as an exemption as per the 80C limitation.

Other than this there is no direct link between them.

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4

  1. Employee Contribution to PF helps you in Tax Savings under Section 80 C as per the limits of 80 C

  2. As per Budget 2020, if an employer’s contribution in EPF account, superannuation fund and Tier-I account of NPS on an aggregate basis exceeds Rs 7.5 lakh in a financial year, then the excess amount will be taxed in your, i.e. the employee’s hands. Further, any interest, return earned on the excess contribution will be taxable in the hands of the employee too.

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5

Agree with @Ankit

Thanks for sharing the Budget 2020 info too :slight_smile: