How to Account for Provident Fund Amount Withdrawn during FY 20-21

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This query is : Resolved

Vikas Kumar (Querist)

21 December 2021 Hi Members,

I am writing this query to seek help regarding the taxability of the Provident fund amount withdrawn by me during FY 2020-21.

I had withdrawn the full accumulated balance in my provident fund account during May '20 and now may I seek your guidance as to how should I include this amount in my tax return.

For your reference, I have not yet completed 5 years of continuous service and have been taking the benefit of Provident fund deduction in the previous tax returns under Sec-80C.

Further, It will be of great help if you could help me with details regarding taxability of the employer's share and employee's share separately along with the treatment required for interest and base component separately as well. Since, I am confused regarding the same having read a couple of articles online.

Thanks in Advance,

PLease let me know in case you require any further details.

Vikas

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

21 December 2021 If withdrawal is made before completion of five years continuous service....
Employer’s contribution and interest on it is taxed under the head 'salary'.
Employee's own contribution becomes taxable under the head 'salary'and if claimed deduction on that contribution under Section 80C of the Income Tax Act.
& interest received on the own contribution to the EPF shall be taxed under the head of 'income from other sources'.

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