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Querist : Anonymous

Querist : Anonymous (Querist)

28 October 2011 Amount paid as acontribution to provident fund is claimed as exemption by employee u/s 80c and that by the employer as expense.
But when Employee receives the same amount on his retirement what is the tax treatment to be given ?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

29 October 2011 The taxability depends upon the type of the Provident Fund to which contribution is being made.

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If the fund is Recognised PF or Statutory PF, the amount receivable at the time of maturity will not be taxable.

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In case the fund is an Unrecognised PF, the amount receivable at the time of maturity will be treated in the following manner-
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Employer's Contribution and Interest on such contribution will be taxed as salary income in the year of receipt.
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Interest on own contribution will be taxed as Interest Income under the head Income from Other Sources.
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Amount of own contribution will have no tax incidence as it is a kind of refund of the amount deposited.
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Querist : Anonymous

Querist : Anonymous (Querist)

30 October 2011 thankyou sir

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