Overview
- Tax recognition for private provident funds will be limited to trusts that secure exemption under Section 17 of the EPF & MP Act, 1952.
- The requirement for employer contributions to match employee contributions and the 12% of wages cap on taxability have been removed.
- Employer contributions are capped at Rs 7.5 lakh per employee per year, with any excess taxable as a perquisite.
- Investment rules will follow EPF norms, including removal of the 50% ceiling on government securities.
- The budget also proposes easing compliance by allowing deductions for employee PF contributions deposited up to the income tax return due date.