Save Rs 588 on a 2-Year Ad-Free CAclubindia Pro Membership. Subscribe Now!

Salary

Save Share

Join Us Follow Us Add as Source

This query is : Resolved

Report Follow Query Ask a Query

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)
Follow

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

.

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

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

Querist : Anonymous

Querist : Anonymous (Querist)

30 October 2011 thankyou sir

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now