INCOME TAX ON PF
This query is : Resolved
29 March 2010
I WORKED 2 YEARS AND LEFT JOB AFTER 6 MONTH I GOT PF RS.35000/- (EMPLOYER 17500 AND MY DEDUCTION RS.17500) AND I AM HAVING OTHER INCOME OF RS.150000/- FOR THE FINANCIAL YEAR 2008-09 PLS LET ME KNOW TAX IMPLICATIONS
I WORKED 2 YEARS AND LEFT JOB AFTER 6 MONTH I GOT PF RS.35000/- (EMPLOYER 17500 AND MY DEDUCTION RS.17500) AND I AM HAVING OTHER INCOME OF RS.150000/- FOR THE FINANCIAL YEAR 2008-09 PLS LET ME KNOW TAX IMPLICATIONS
CA. B.SRINIVASULU
(Expert)
29 March 2010
Amounts received back from PF is exempt from tax.
29 March 2010
1. If it is a statutory providend fund, the entire amount is exempt from tax under section 10(11) of the Income tax Act,1961.
2. If it is a recognised providend fund,the amount received is taxable since the employee had not rendered continuous service of five years.
3. If it an unrecognised providend fund, the accumulated balance of employers contribution along with interest accrued on that part of contribution is taxable as profit in lieu of salary. Interest on employee's contribution is taxable under the head"income from other sources' as per supreme court decision in the case of CIT Vs Hyatt (1971) 80 ITR 177.
2. If it is a recognised providend fund,the amount received is taxable since the employee had not rendered continuous service of five years.
3. If it an unrecognised providend fund, the accumulated balance of employers contribution along with interest accrued on that part of contribution is taxable as profit in lieu of salary. Interest on employee's contribution is taxable under the head"income from other sources' as per supreme court decision in the case of CIT Vs Hyatt (1971) 80 ITR 177.
CMA Arif Farooqui
(Expert)
02 April 2010
agreed with B.Chackrapani Warrier sir
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