If you’ve gotten withdrawn cash from the Employees Provident Fund (EPFO) through the monetary yr 2019-20 to cope with any monetary disaster amid the coronavirus pandemic, then you’ll have to inform the taxman whereas submitting your revenue tax return.
Experts have mentioned details about the withdrawal from the PF account should be furnished in your revenue tax return type or ITR type even when the quantity withdrawn is outdoors the purview of revenue tax. There is a provision for withdrawal on completion of 5 years of steady service of the worker. But in the event that they withdraw their PF earlier than the interval of 5 years, then they should pay tax in line with the foundations underneath the revenue tax regulation.
The authorities has allowed individuals to withdraw from PF within the wake of the coronavirus pandemic. Employees can withdraw as much as 75% of their account or three months fundamental wage and dearness allowance, whichever is much less. For instance, when you’ve got an excellent of Rs 100,000 in your PF account and your fundamental wage and dearness allowance is a complete of Rs 20,000 monthly, then you can be eligible to withdraw as much as Rs 60,000.
As per authorities directives, an worker can withdraw cash underneath the pandemic aid even when they haven’t accomplished 5 years of service. However, consultants advocate that the details about the quantity withdrawn have to be given on the time of submitting the revenue tax return as there could be a mismatch if the Income Tax division examines the taxpayer’s account.
This yr, the ITR return type has a particular column for together with details about PF withdrawal. This implies that it’s inside the scope of exemption however it’s nonetheless essential to indicate it. There isn’t any penalty of any type on this quantity. Under Section 80C of the Income Tax act, a tax deduction of Rs 150,000 every year is given in PF.