sir
Guide me about Taxation on Provident Fund amount received by Bank employee on his resignation from Bank.
Bank is PNB and amount received is 1.25 Lakhs.
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Tax on Provident Fund Received on Resignation
Replies (3)
What kind of PF it is ? RPF, URPF, SPF as per income tax act 1961
RPF and SPF are exempted but URPF is taxable.
RPF and SPF are exempted but URPF is taxable.
It's RPF.
Please let me know the section.
He resigned from the bank after completing 2 years as an employee.
Please let me know the section.
He resigned from the bank after completing 2 years as an employee.
Exemption available under section 10(12) of the Income Tax Act– Provisions of section 10(12) exempt the accumulated balance, due and payable, to the employee participating in the Recognized Provident Fund.
The exemption is available to the extent covered in Rule 8 of Part A of the Fourth Schedule.
As per rule 8 of part A of the fourth schedule, accumulated balance payable to an employee covered in a Recognized Provident Fund shall be exempted only under any of the following cases- 1.The employee has provided continuous service, with his employer, for a period of 5 years or more.
2.In case the service of the employee is terminated before the period of 5 years, the reason for termination should be any of the following- Termination of service due to Employee’s ill-health; or Termination of service by the contraction; or Termination of service due to discontinuation of employer’s business; or Termination of service due to any reason which is beyond the control of the employee.
3.In case of cessation of employment, the employee takes employment with any other employer, then, the accumulated balance (due and payable) to the employee is transferred to his individual account in any Recognized Provident Fund managed by such other employer
Conclusion:S
BI contribution and interest thereon is taxable as salary Income
Interest on Employee contribution as under Income from other sources.
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