CBDT Vide Notification No. 95/2021 dated 31.08.2021 has inserted a new Rule, Rule 9D for calculation of taxable interest relating to contribution in a provident fund or recognised provident fund, exceeding specified limit.

Important Points to be considered:

1. This Rule come into force from 01st April 2022.
2. This Rule is related to Interest Income related to contributions made to recognised/ statutory provident fund
3. Threshold limit is Rs. 2.5 Lakhs in case of recognised provident fund and Rs. 5 Lakhs Statutory provident fund.
4. Statutory/ Recognised Provident Fund shall maintain separate books of accounts for taxable and exempt contribution.
5. Non-taxable contribution account shall be the aggregate of the following, namely:-
   1. closing balance in the account as on 31/03/2021;
   2. any contribution made by the person in the account during the previous year 2021-2022 and subsequent previous years, which is not included in the taxable contribution account; and
   3. interest accrued on sub- clause (i) and sub- clause (ii), as reduced by the withdrawal, if any, from such account;
6. Taxable contribution account shall be the aggregate of the following, namely:-
   1. contribution made by the person in a previous year in the account during the previous year 2021-2022 and subsequent previous years, which is in excess of the threshold limit; and
   2. interest accrued on sub- clause (i), as reduced by the withdrawal, if any, from such account

Download official Notification No. 95/2021 with below link: