A query in income tax

Fund

During Continuity of Job

Upon Retirement

Employee’s Contribution

Employer’s Contribution

Interest on Provident Fund

Repayment of sum on retirement, resignation or termination

RPF

Deduction under Section 80C is available.

Exempt upto 12% of Salary. Thus Contribution made by employer exceeding 12% shall be added to employee’s salary Income.

Exempt upto 9.5%. Interest exceeding 9.5% shall be added to employee’s Salary Income.

Nothing is taxable subject to following conditions:

1. Employee left the job after five years of service OR
2. Where Period of service less than 5 years, the termination is due to ill health, discontinuance of business of employer. OR
3. here on re-employment, the balance in R.P.F is transferred to R.P.F with new employer. [For the purpose of computing 5 years period, Period of services rendered with previous employer shall also be included.]

If none of the above conditions are satisfied then:

1. The amount not taxed earlier shall be taxed in the same manner as URPF, given below.
2. Any tax concession (e.g. 80C) availed by assesses for contribution to RPF shall now be withdrawn.

URPF

No deduction under section 80C available

Any amount of contribution is not taxable

Not taxable

Sum received on retirement/ termination comprise of following:

Employer’s Contribution and interest there on: Taxable as Salary Income.
Employee’s own Contribution : It is not taxable.
Interest on employee’s contribution: Taxable as income from other sources.

SPF

Deduction under Section 80C is available.

Fully Exempt

Fully Exempt

Fully Exempt

PPF

Assessee / Employee can make contribution to PPF, No concept of Employer’s Contribution. Deduction under section 80C available on contribution made.

Amount received (including interest) is Fully Exempt.