Question
Is VPF interest taxable above ₹2.5 lakh?
Answer
Bottom line: Yes — interest on your own PF plus VPF contributions above ₹2,50,000 in a year is taxable.
1. The threshold
From FY 2021-22, interest on employee contributions over ₹2.5 lakh a year is taxed; the limit is ₹5 lakh where there is no employer contribution.
2. What counts
Only your contribution (EPF plus VPF), not the employer's, is measured against the limit.
3. TDS
The taxable interest is subject to TDS by EPFO.
Project your PF with our EPF Calculator.
This answer is general information based on the law as it stood when written and is not professional advice on your specific situation. Verify the current position and consult a qualified professional before acting. See our disclaimer.