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Why You Will Have To Show The Details Of Withdrawn PF Amount In ITR?

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During the financial year 2019-20, if you have withdrawn your capital from the Employees Provident Fund (EPFO) to cope with any emergency crisis in the aftermath of the coronavirus pandemic, then you will have to report the tax authority while declaring your income tax return. Advisors also stated that withdrawal details from the PF account even though the withdrawn amount is beyond the income tax range, will need to be mentioned in the income tax return form. A withdrawal clause is in force with the completion of five years of uninterrupted employment of an employee.

 

Although if you withdraw your PF before the five-year period, they must pay tax in compliance with the laws laid down in the statute of income tax. In the aftermath of the coronavirus pandemic, the government has authorized individuals to withdraw from PF. And considering the same employees can initiate a withdrawal up to 75% from their PF corpus or the basic wage and dearness allowance of three months, whichever is less. For instance, if you have a balance of Rs 100,000 in your PF account and a total of Rs 20,000 per month is your basic salary and dearness allowance, then you can trigger a withdrawal up to Rs 60,000 respectively.

Why You Will Have To Show The Details Of Withdrawn PF Amount In ITR?

Even though he or she has not completed five years of service, an employee can make a withdrawal from PF account under the pandemic relief as per the directives of the government. That being said, advisors admit that details of the amount withdrawn must be recorded at the time of filing ITR because if the income tax department investigates the taxpayer's account, there will be a discrepancy. The ITR return form has a separate column this year for the taxpayers to mention details of the withdrawn amount from their PF account. This implies that as it is within the range of deduction, still it is mandatory to specify in the ITR form. A tax exemption of Rs 150,000 per annum is provided in PF under section 80C of the Income Tax Act.

 

If the withdrawn amount is more than Rs 50,000 and the employment duration is less than five years, Form 15G/15H can be submitted by the subscriber to avoid TDS in circumstances where the income for that year is within the taxable cap. Form 15H is for elderly people (60 years of age and over) and Form 15G is for those without taxable income, respectively.

Read more about: pf
Story first published: Wednesday, December 2, 2020, 15:44 [IST]
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