Provident fund

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This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 April 2015 IF ONE PERSON HAS WITHDRAWN PF WITHIN 5 YEARS AND STARTED HIS BUSINESS THEN WHAT WILL BE TAX IMPLICATION

ANSWER WILL BE CHANGE IF HE HAS NOT STARTED HIS BUSINESS

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

11 April 2015 Whether he started his business or not PF withdrawal within 5 years is taxable.

CA AnKiT BoHrA (AB)

CA AnKiT BoHrA (AB) (Expert)

11 April 2015 it is taxable... business starts or not doesnt matters

Querist : Anonymous

Querist : Anonymous (Querist)

11 April 2015 please tell me But its matter or not that PF is recognised or not .we have to confirm with employee for this
and is there any requirement for splilt the amount like Interest on employee contri will be taxed in IFOS and remaining in Salary head subject to Relief 89
or we can taxed that amount in salary head

Querist : Anonymous

Querist : Anonymous (Querist)

11 April 2015 ankit sir, please tell me its matter or not that PF is recognised or not .
we have to confirm with employee for this and
is there any requirement for splilt the amount like Interest on employee contri will be taxed in IFOS and remaining in Salary head subject to Relief 89 or
we can taxed that amount in salary head

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

11 April 2015 where the PF amount is withdrawn before five years of continuous service, it may be taxable in the hands of the individual as if the fund was not recognised from the start of the contributions. In such a case, payment received by the individual in respect of the employer’s contribution along with the interest accrual thereon is taxed as “salary”. Interest on the employee’s contribution is taxable as “other income”. Payment received in respect of the employee’s own contribution is exempt from tax to the extent not claimed as a deduction earlier. To the extent of exemption claimed earlier (employees contribution) it will be taxed.

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