New PF tax rules from April: How it will impact you

The salaried employees who use Voluntary Provident Fund to invest more than mandatory 12% of basic pay, will also be impacted by this new rule

Finance minister Nirmala Sitharaman announced in Budget 2021 that interest on employee contributions to the provident fund of over ₹2.5 lakh per annum would be taxed, starting from 1 April. Up to ₹2.5 lakh has been kept as the deposit limit for which interest is tax-exempt, the finance minister said. At least 12% of an employee's basic salary and performance wages is compulsorily deducted as provident fund, while the employer contributes another 12%

"As paying tax-free interest on provident fund becomes more and more unsustainable, the government wants to curb high-income earners from self-contributing more to their PF accounts,"

This move will affect high-income earners and High Net-worth Individuals (HNIs). Anyone who earns more than ₹20.83 lakh a year will attract his or her interest in EPF contribution being taxed. "It may be noted that the new provision only takes into account employees’ contribution and not the total contribution to the fund during any year,"

"Under the existing tax provisions, interest received/accrued from employee’s provident fund (EPF) is exempt from tax. It is proposed that the interest earned on the EPF contributions (only employee contribution) above ₹2.5 lakh a year will now be taxable. This could potentially impact employees in high-income bracket or employees making large voluntary employee provident fund contributions,"

"Under the existing tax provisions, interest received/accrued from employee’s provident fund (EPF) is exempt from tax. It is proposed that the interest earned on the EPF contributions (only employee contribution) above ₹2.5 lakh a year will now be taxable. This could potentially impact employees in high-income bracket or employees making large voluntary employee provident fund contributions"

Online Application for TAN

 Application Procedure (Online)

  1. An applicant for TAN needs to be filled in Form 49B online. https://tin.tin.nsdl.com/tan/form49B.html
  2. In case there’s an error, it needs to be rectified and the form needs to be re-submitted.
  3. A confirmation screen with data filled which is provided by the applicant would be displayed.
  4. The applicant can edit or confirm the same.

Make Changes in PAN card

 If you want to make changes in the existing PAN such as change in name, date of birth etc, you can apply for it online. The procedure is almost the same as you apply for new PAN except in case of corrections in PAN, you also need to submit the documents to support the change required in PAN.

Here are the steps :

How to submit online application of PAN Card

 

Step 1: Submit the PAN card application Form 49A available on the NSDL Website https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html

pan1

Step 2: Fill all the details in the form. Read the detailed instructions before furnishing the details in the form. https://tin.tin.nsdl.com/pan/Instructions49A.html#instruct_form49A