The Indian government has made a significant change to the tax-free status of Employees’ Provident Fund (EPF) contributions. Finance Minister Nirmala Sitharaman announced in her Budget 2024 speech that starting from FY2021-22, the interest on EPF contributions up to ₹2.5 lakh per year will remain tax-free. However, interest on contributions exceeding ₹2.5 lakh per year will be subject to tax. This decision has sparked a wave of outrage on Reddit, with users expressing their frustration and amusement in equal measure.
One Reddit user, going by the username “Real_Alonemusk,” shared an image listing various taxable items under the Prime Minister Narendra Modi 3.0 coalition government, including dividends, stocks, fixed deposits, and now, Provident Fund. The user’s sarcastic question, “What else is left to tax??” triggered a barrage of humorous and cynical responses.
Users jokingly suggested taxing activities like breathing air, visiting barber shops, and even the amount of tax one pays. Others pointed out the irony of the government’s decision, suggesting taxes on bridge collapses, politicians’ assets, and even a “politician tax.” Some users even expressed concerns about a future where even checking Reddit notifications might be subject to taxation.
In a more serious vein, some users highlighted the increasing tax burden on individuals, questioning what will be left for them to keep. The proposed change has prompted widespread discussion and debate about the government’s tax policies and their impact on the average citizen.
The specific details of the tax on EPF interest exceeding ₹2.5 lakh are still being clarified. However, it’s important to note that interest on the employer’s EPF contribution is tax-free up to 12% of the employee’s salary. The taxable interest is only on the employee’s contributions that exceed the ₹2.5 lakh limit. This taxable interest will be added to the individual’s total income and taxed according to their applicable income tax bracket.
