Max VPF, a private salaried class employee, can claim to avoid tax as per the new income tax law. Like last year, the Income Tax Department created a new law according to which if the contribution to PF is more than 2.5 lakh, then the amount beyond this 2.5 lakh will be taxable. Something like that.
Please confirm for me how much one can contribute beyond the PF amount so that the excess VPF will not fall into the taxable category.
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From India, Meerut
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Please confirm for me how much one can contribute beyond the PF amount so that the excess VPF will not fall into the taxable category.
Thanks
From India, Meerut
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Provident Fund and Voluntary Contribution of PF
Provident Fund and Voluntary Contribution of PF are exempted within the limits of 80C. 80C has a capping of Rs 1,50,000. As such, even if you contribute more than Rs 1,50,000 towards PF, the tax benefit will be restricted only to Rs 1,50,000. This shall include PF, life insurance premium, housing loan principal repayment, fixed deposit for more than 5 years' duration, and a few other investments.
Therefore, if you do not have other investments coming under the exemption admissible under 80C, i.e., housing loan, life insurance, FD, etc., then contributing to PF for any amount higher than Rs 1,50,000 will not give you any benefit in respect of income tax.
From India, Kannur
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4526Provident Fund and Voluntary Contribution of PF are exempted within the limits of 80C. 80C has a capping of Rs 1,50,000. As such, even if you contribute more than Rs 1,50,000 towards PF, the tax benefit will be restricted only to Rs 1,50,000. This shall include PF, life insurance premium, housing loan principal repayment, fixed deposit for more than 5 years' duration, and a few other investments.
Therefore, if you do not have other investments coming under the exemption admissible under 80C, i.e., housing loan, life insurance, FD, etc., then contributing to PF for any amount higher than Rs 1,50,000 will not give you any benefit in respect of income tax.
From India, Kannur
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Circular No 1-2018 Processing of income-tax returns under section 143(1) of the Income-tax Act .pdf
Income Tax Calculator.xls