• This means that if an individual’s own contribution to the employees’ provident fund in a month is up to Rs41,666 (Rs5 lakh in a year), there will be no tax on the interest income.

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• However, if the contribution exceeds that, then interest income on the additional contribution will be taxed.
• Individuals earning more than that a monthly basic salary of Rs 3,47,216 will remain impacted as their annual EPF contributions (at a rate of 12% of basic salary)
  would exceed Rs 5 lakh.
• So,if an individual contributes Rs 12 lakh in a year, the tax will be applicable on interest income on Rs 7 lakh (Rs 12 lakh – Rs 5 lakh).
• While the interest income on Rs 7 lakh would amount to Rs 59,500 (at an EPF
  interest rate of 8.5%), the tax payable on it would be Rs18,450 (at the marginal tax rate of 30%).