Tax talk

SANJIV CHAUDHARY | Updated on March 10, 2018 Published on May 18, 2013

Employee’s contribution to PF need not be reported as exempt income

Previously I was using ITR-4S, but in FY 2012-13, I have capital gains for which there is no column in ITR-4S. Which form should I use to show both presumptive income and capital gains?

 - Narasimha Rao

For AY 2013-14 (FY 2012-13), ITR-4S is applicable where the assessee has presumptive business income referred in section 44AD or section 44AE of the Income-tax Act, 1961. ITR-4S can also be used to report income from salary, income from one house property (excluding brought forward losses) and income from other sources along with the presumptive business income.

Since, for FY 2012-13, you also have income from capital gains, ITR-4S is not applicable in your case. Hence, you would need to file your tax return for the FY 2012-13 using ITR-4, where you can fill both presumptive income and capital gains details.

I have withdrawn my PF balance in May 2012 after serving the company for 7 years. The withdrawal details are as follows:

My contribution: Rs 3 lakh; employer’s contribution: Rs 2.5 lakh; interest earned: Rs 1.5 lakh; Total: Rs 7 lakh. I would like to seek some advice before filing the income tax return for AY 2013-14. Under which heading should I show this PF withdrawal amount? I am going to file Form ITR2. Which amount of PF withdrawal needs to be mentioned?

 - S.J. Hari

We assume that you had contributed to a Recognised Provident Fund (RPF) for last 7 years. Hence, according to the provisions of the Income-tax Act, 1961, the withdrawal from the RPF, after rendering continuous service of at least 5 years with the employer, is exempt from income tax. Thus, the proceeds from your RPF account, received after 7 years of service, would not be taxable in your hands.

Please note that you would be required to report the exempt income of Rs 4 lakh, i.e. sum of employer’s contribution and the interest earned, while filing your tax return for FY 2012-13. Employee’s contribution is not an income and hence it need not be reported as an exempt income.

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Published on May 18, 2013
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