Govt raises PF threshold limit to Rs 5 lakh for earning tax-free interest

New Delhi: Finance Minister Nirmala Sitharaman on Tuesday raised the limit for tax exemption on interest earned on provident fund contribution by employees to Rs 5 lakh per annum in specified cases as against Rs 2.5 lakh proposed in the Budget.

However, the minister in her reply to discussion on Finance Bill 2021 in the Lok Sabha said the concession would be available to employees only in cases where his or her employer does not make any contribution to the retirement fund.

The Finance Bill was later passed by the Lower House with 127 official amendments by voice vote. With the passage of the Finance Bill, which contains tax proposals for the next financial year, the Lok Sabha has completed the budgetary exercise for 2021-22.