Provident Fund is an important instrument for financial security in India for crores of employees across private and public sectors. In our country where there is almost nothing available in the name of social security, for the longest time tax free interest on contribution to PF has been an assured return on a significant part of hard earned money of salaried class. A large number of us check the PF balance and interest accrued on EPFO portal every month and feel happy about the financial security as well as funding support it can offer in time of needs.

Govt of India has now passed the rule to tax interest on PF contribution above INR 2.5 Lacs on the pretext of taxing HNIs who are apparently parking huge amount of money. While this will not impact a large % of salaried class, this would impact middle class/ upper middle class highly skilled employees who have worked hard to get a salary level where the statutory deduction for PF may be higher than INR 2.5 Lacs. Why should they be penalized for statutory contribution? GOI should differentiate between minimum statutory contribution and voluntary contribution to PF and may tax only if the threshold is exceeded through voluntary contribution.

Petitioning for immediate withdrawal of this tax proposal