Income Tax on amount received from Provident Fund

By | September 8, 2018
(Last Updated On: September 8, 2018)

Income Tax on amount received from Provident Fund

What is the taxability of amount received from Provident Fund under Income Tax Act ?

​​In the hands of a Government employee Provident Fund receipts exempt from tax [ Section 10(11) of Income tax Act ]

As per Section 10(12) of Income Tax Act 1961 : In the hands of non-Government employee ,  PF receipts are exempt from tax as provided in Rule 8 of Part A of the Fourth Schedule  of Income Tax Act  1961:

i)if the same are received from a recognized PF after rendering continuous service of not less than 5 years.​

ii)if, though he has not rendered such continuous service, the service has been terminated by reason of the employee’s ill-health, or by the contraction or discontinuance of the employer’s business or other cause beyond the control of the employee, or

(iii) if, on the cessation of his employment, the employee obtains employment with any other employer, to the extent the accumulated balance due and becoming payable to him is transferred to his individual account in any recognised provident fund maintained by such other employer; or

(iv) if the entire balance standing to the credit of the employee is transferred to his account under a pension scheme referred to in section 80CCD and notified by the Central Government.]

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