B Negative: Two tax-free options go poof SECTIONS Last Updated: Feb 02, 2021, 09:05 AM IST Share Synopsis The tax on PF interest comes after the last budget had capped the tax exemption on employers’ contribution to PF, NPS and superannuation fund to Rs 7.5 lakh. That impacted only employees with very high salaries. This year’s proposal has a wider impact. iStock Interest on employee PF contribution and ULIP premium over Rs 2.5 lakh a year are now taxable. NEW DELHI: Two widely preferred tax-free options for high-income earners have been made unattractive by the budget. First, interest earned by employees’ Provident Fund contributions above Rs 2.5 lakh a year will now be taxed at the prevailing income tax rates. Employers’ contribution is not part of this.