The government has decided to reduce the tax benefits on PF, in a move to target high-income earners who benefit from the scheme.

The Employee Provident Fund (EPF) is among millions of employees' most important financial planning and retirement investment choices.

From April 1, 2022, provident fund accounts have been divided into taxable and non-taxable accounts.  

Under Budget 2021, the government has decided to reduce the tax benefits to target high-income earners who benefit from the EEE scheme. 

Here are the ten points that you need to know about EPF:

1. Any interest on contributions made towards EPF of an employee only remains tax-free for contributions of up to ₹ 2.5 lakh a year. 

2. Interest on contributions of over ₹ 2.5 lakh is taxed from the employee yearly.

3. The contribution threshold is increased to ₹ 5 lakh if an employer is not contributing towards the EPF of an employee. 

3. The contribution threshold is increased to ₹ 5 lakh if an employer is not contributing towards the EPF of an employee. 

4. The excess contributions and interest accrued on it will be maintained in a separate account with the EPFO. 

5. Employer's contribution to Provident Fund (PF), NPS and superannuation aggregating to a total sum of ₹ 7.5 lakh a year is exempt from taxes. 

7. Employers must mandatorily provide EPF contributions for employees whose monthly income is up to ₹ 15,000. 

8. The EPFO has reduced the interest rate to a four-decade low of 8.1 per cent for FY 2021-22.