1.
April
onwards, PF contribution over Rs 2.5 lakh will be taxable
The effect will be felt by those employees with
high salaries, who voluntarily contribute to the provident fund for tax-free
interest.
Come April, and the interest on employees’ contributions to Provident Fund (PF)
beyond Rs 2.5 lakh will be taxed. While those above the age of 75 years will
not need to file income tax returns as long as they receive a pension and
income from interest only, when it comes to the interest earned on an accrual
basis for employees’ contribution to PF — statutory or voluntary contribution —
beyond Rs 2.5 lakh, it will attract a tax. This is the Government’s way of
restricting tax exemption for high-income employees. The restriction will apply
to contributions made on or after April 1, 2021. As per the words of the
Finance Minister, “In order to rationalise tax exemption for the income earned
by high income employees, it is proposed to restrict tax exemption for the
interest income earned on the employees’ contribution to various provident
funds to the annual contribution of Rs 2.5 lakh. This restriction shall be
applicable only for the contribution made on or after 01.04.2021.”
2.
Budget 2021 ensures
employers deposit EPF contribution on time
If the employers fail to deposit on time, it
will not be considered an expense to the employers. This
year’s budget, has come up with a way to ensure that companies and employers
deposit their contributions to the provident fund on time. If they not make the
deposit within the stipulated time, the contribution will not be considered as
an expense. This means a delay on their part will mean foregoing deduction.
This will not only ensure that employers deposit on time, but will also see to
it that they don’t use that money elsewhere. In addition, employees can be sure
of not losing any interest or income on such contributions. This move is in
favour of the employees as they are assured of security, as their employers
will be forced to prioritise payment of PF or social security dues or else they
will lose out in terms of corporate tax deduction. An amendment to this effect
is suggested in the Finance Bill 2021. As per the rules, the employer’s
contribution towards PF for a particular month should be deposited by the 15th
of the following month, so that the interest accrual begins with effect from
the first of the month after that.
3.
$2.6 mn
in back pay, $3.8 mn in settlement by Google
The technology company
had been accused of underpaying women and Asians. A
compliance audit a few years ago had brought to light that Google had been
underpaying its women employees and was discriminating against Asians and women
when it came to job opportunities. Investigations had revealed that during the
period 2014 to 2017, about 2,783 women employees in its software engineering
team were being underpaid. It was also brought to light that in 2017, the
Company had passed over several women and Asian candidates for various roles in
the software engineering wing, in various parts of the country, including California,
Washington and San Francisco. To settle the allegations and resolve the issue,
the technology major will now spend $2.6 million in back pay for about 5,500
employees and aspiring candidates. The Company will also have to take a relook
at its hiring practices and salary structure to ensure that women are not at a
disadvantage and there is no discrimination of any sort.
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