Hi - Can someone clarify if I can get relief under section 89 if I file a form 10(e) for EPF withdrawal in a case where the continous service is less than 5 years? If yes, which years can this be applied to, ie both the employment and post-employment period?
Appreciate your help,
regards
murali
Can you claim Section 89(1) relief via Form 10E? Yes, it is legally permissible to avoid a higher tax slab impact.
Which years apply? The income must be spread back to the active employment years during which the corpus was built. Any interest earned during the post-employment period before final withdrawal is allocated strictly to the specific financial years in which that interest accrued.
Thanks Aashok. I have one question though on the second part, "interest paid in the non-employment years to be accrued in the same FY", is this correct? I read that, although reported as salary income, the interest is going to be recognised only on the FY of the withdrawal and can't be accrued. Appreciate your thoughts on this. I haven't looked at it, but I am told form 10(e) wouldn't allow you show the interest unless there is a contribution in that FY.
thanks
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