New Delhi: If you have withdrawn money from the Employees Provident Fund (EPF) account in FY 2019-20, it is necessary to give this information in the income tax return. According to tax experts, in some circumstances it is necessary to mention the money withdrawn from the PF account in the income tax return, despite the income tax exemption. According to Balwant Jain, chief editor of Paisa Bazaar.com, in some cases, if you make partial withdrawal from the amount deposited in your PF account, then there is a benefit of tax exemption in it, but in spite of this information should be given in the income tax return.
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Because of this it is necessary to do so
Jain said that if the information about exempted income is not given, there may be a difference in the figures while calculating the income of the taxpayer by the Income Tax Department. He said that the income tax form has a designated place to give information about exempted income, where you should give information about it. However, if you do not provide information on withdrawal from EPF account, then you will not face any penalty because in most cases this income is outside the tax net.
t is worth mentioning that in some cases, there is a tax exemption on withdrawing money from EPF account even before five years. If due to illness or any such reason, if a person leaves a job, which is not under his control, withdrawal from EPF account gives the benefit of tax exemption.
The government has recently allowed partial withdrawal of funds in Provident Fund account to those facing financial crisis due to Kovid-19. Under this relief, an employee can withdraw 75 per cent of the amount deposited in his PF account or three months basic salary and dearness allowance, whichever is less.
For example, if you have two lakh rupees deposited in your PF account, but your basic salary and dearness allowance adds up to Rs 30,000 per month, then you can withdraw a maximum of Rs 90 thousand.
No tax is payable on withdrawals made as Kovid-Relief even after the completion of five years of job.
However, despite this, experts say that it is better to give this information in the income tax return.
