Tax of Interest on PF contribution over Rs 2.5 L


Suggest some investment options for earners who will come under the taxability of PF interest on contributions above Rs 2.5 Lakh.

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Few good options for employees earning a high salary can choose to adopt a combination of EPF and NPS to maximise returns and minimise tax outgo.

NPS returns are tax-exempt except at the time of withdrawals upon maturity. Also at maturity, 60% of the corpus is tax-free while 40% is mandatorily converted into an annuity, which is taxable as salary income. Though NPS is not an EEE scheme, one can evaluate the tax benefits available in NPS.

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