provident fund

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sangeeta agarwal lhila (Querist)

21 December 2007 Due to termination of services after completing three years of working, the provident fund amount after deduction of tax is paid to the employee. what will be the treatment of the amount so received? can it be carried over directly to capital or will it be credited in p/l and be liable to tax at the normal rates? please advise

K V Subba Rao

K V Subba Rao (Expert)

21 December 2007 There is no clarity in the question. In this case, the receipient is employee. There is no question of maintaining P & L Account and Balance Sheet in case of assessess receiving salary income.

When it comes to employer, he doesn't receive any amount. So how does the question of crediting Capital or P & L arise

If you could express clearly, we shall be able to use this Forum effectively to fulfill the objective of "Let us grow stronger by mutual exchange of knowledge"

sangeeta agarwal lhila

sangeeta agarwal lhila (Querist)

21 December 2007 Your point is well taken. I was just trying to be brief.
This is for the recepient's individual file.

sangeeta agarwal lhila

sangeeta agarwal lhila (Querist)

21 December 2007 Your point is well taken. I was just trying to be brief.
This is for the recepient's individual file.

K V Subba Rao

K V Subba Rao (Expert)

22 December 2007 Refer Note-3 in Page A-46 of 30th edition of Singhania's Direct Taxes Ready Reckoner

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