After the presentation of the budget, new decisions have also been taken on EPF withdrawal, which will directly benefit the people keeping money in Employee Provident Fund and withdrawing money from it. This fixed deposit, which gives money at an interest rate of 8.10%, will now be able to provide better returns to the people.
Less TDS will be deducted on withdrawing money from PF.
A big decision has also been taken in the budget regarding Employees’ Provident Fund (EPF). Finance Minister Nirmala Sitharaman has changed the tax rules regarding withdrawal from PF. Now 20 percent TDS will be levied instead of 30 for withdrawing money from PF account in less than five years. This will also benefit those account holders whose PAN is not yet updated.
Understand the new rule.
As per the rules, if an account holder withdraws money within five years, he has to pay TDS. At the same time, no TDS is levied after five years. If PAN card is not linked, 30% TDS is deducted. This rate has also been reduced to 10 percent. The new rule will come into effect from April 1, 2023.
Interest rate of EPFO may increase
In the upcoming EPFO meeting, decisions can be taken to further increase the existing available interest rates and attract investors for a long time. The increase in the new interest rates will be taken keeping in mind that people invest in this fund for a long period of time and for the same long period, many other options available in the market are providing higher returns. According to estimates, up to 9% return on investment can be found in EPFO soon. In 2016 this return was 8.5% and now it is 8.1%.