Interest that is generated from VPF contribution is taxable or exempted ?what are the rules regarding taxablity of VPF Interest earned ?
Under Section 80C of the Income Tax Act, 1961, employees are eligible for tax benefits of up to Rs. 1.5 lakh. The interest that is generated from these contributions is also exempt from tax.
If deposits in Employees’ Provident Fund (EPF) and Voluntary Provident Fund ( VPF ) by an employee exceed Rs 2.5 lakh in a financial year, then the interest earned on the contributions exceeding Rs 2.5 lakh will be taxable in the hands of an employee.