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PF withdrawal

Neeraja (TL ) (21 Points)

22 July 2019

where do we need to show the PF withdrawal amount in ITR 1 where the amount is withdrawn before 5 years of service and it is taxable.

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3 Replies

J S BHAVSAR (CONSULTING) (1288 Points)
Replied 22 July 2019

The article here may help you to understand the tax liability and I feel the form to be used is ITR2.

https://economictimes.indiatimes.com/wealth/tax/new-itr-forms-ask-for-year-wise-pf-contribution-details-in-case-of-taxable-withdrawal/articleshow/65715645.cms?from=mdr

Suresh Thiyagarajan (Student) (3986 Points)
Replied 22 July 2019

1. It will be taxable under the head Salary. It is important to be noted that only employers contribution and interest earned on the same will be taxable under this head.
2. Employee's contribution will not be taxable provided deductions u/s 80C is not claimed. If the same was claimed as deductions then employee's contribution will also be subject to tax.
3. The amount withdrawn from PF can be shown as a part of Salary as it is nothing but an accumulation of salary over a period of time.
Please correct me if the above solution has an alternative view.

J S BHAVSAR (CONSULTING) (1288 Points)
Replied 22 July 2019

After department brought new ITR forms in Sept 2018 where clarifications were made to PF withdrawals less than five years, such amount where employment was less than five years cannot be filed in ITR1 under Salary income. Because, department has already made provision in ITR2 form for declaring the same and they wish to know the yearwise breakup of five years and not a consolidated view.