Business: While filing Income Tax Return (ITR), if someone has withdrawn money from the Employees Provident Fund (EPF) during the financial year 2019-20, then it is necessary to give information about it. This information has to be given even though the amount withdrawn is outside the purview of tax. An employee can withdraw funds from the Provident Fund after completing 5 years of service. At the same time, if an employee withdraws his PF before the completion of 5 years, then he has to pay tax according to the rules of the Income Tax Department.
Why it is important to give information about the amount?
The government has allowed people to withdraw funds from the PF due to the coronavirus pandemic. Employees can withdraw up to 75% of the amount from their account. According to the government guidelines, the employee has been exempted from tax under the corona relief even if he has not completed 5 years of service. However, experts recommend giving the amount withdrawn when filing an income tax return.
The penalty will not be imposed on giving information
If the amount withdrawn from the PF account is not given at the time of filing the ITR, then it can be a mismatch when the Income Tax Department examines the taxpayer’s account. Even though there is a provision for exemption on withdrawal from PF account, there is a special column to give information about it in the form. This means it is within the purview of exemptions, but it is still necessary to show it. There is no penalty of any kind on this amount.
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