How treat pf refund in income tax

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Querist : Anonymous (Querist)

17 August 2014 Pf Refund is Taxable

CMA. CS. Sanjay Gupta

CMA. CS. Sanjay Gupta (Expert)
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17 August 2014 Are you asking about PF amount received on retirement?

Any payment received from a Provident Fund, (i.e. to which the Provident Fund Act, 1925 applies) is exempt. Any payment from any other provident fund notified by the Central Govt. is also exempt.

Please refer Section 10(11).

If PF withdrawn before 5 years of continuous service then the entire amount will be taxable i.e., Employer Contribution and Interest, Employee contribution for which deduction u/s 80C availed and interest on employee contribution.

Nikhil Kaushik

Nikhil Kaushik (Expert)
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17 August 2014 If the PF amount is withdrawn before 5 years of continuous services without being covered under permitted withdrawals, employer's contribution plus interest thereon shall be taxed as profit in lieu of salary. Interest on employee's contribution shall be taxed as income from other sources.

The principal contribution by employee against which 80C benefit has been taken shall also be reversed and taxed in the year in which withdrawal is made

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