Provident fund balance withdrawal is taxable for this reason

By: | Published: September 4, 2017 2:33 AM

Withdrawal of the accumulated balance from a recognized PF is taxable if the employee has not rendered continuous service for five years or more to the employer, subject to certain exceptions.

Provident fund, PF, tax, SMSWithdrawal of the accumulated balance from a recognized PF is taxable if the employee has not rendered continuous service for five years or more to the employer, subject to certain exceptions.

If we claim the accumulated balance in Provident Fund account from the previous employer, will it be taxable?

Laxmi Narayan

Withdrawal of the accumulated balance from a recognized PF is taxable if the employee has not rendered continuous service for five years or more to the employer, subject to certain exceptions. While computing the continuous service of five years, the period of previous employment is also included, if the accumulated balance maintained with the old employer is transferred to the PF account of the new employer. Hence, if an individual withdraws the PF balance anytime before rendering five years of continuous services with an employer subject to the above, the amount may be taxable in the individual’s hands.

If a property is gifted to me, will I have to pay capital gains tax on it?

Amit Gopal

As per the Indian tax provisions, if a property (immovable) is gifted to an individual without consideration, it will be taxable in the hands of the recipient as income from other sources. However, there are certain exceptions from taxation on gifts received from a relative or on occasion of marriage or by way of inheritance, etc.

I had sold some shares last year to book profit. Of these, some were held for less than a year. Do I have to pay short-term capital gains tax or can I give it a miss this time?

Gopal Krishnan

Profit on sale of equity shares listed on a recognized stock exchange in India, on which STT is paid, if held for a period of less than 12 months are considered as short term capital gains and is taxable @ 15%. If no STT has been paid on such transactions, the same shall be chargeable to tax at the applicable slab rates in the hands of the owner. Hence, the capital gains chargeable to tax as computed above, should be offered to tax in the I-T return filed for the assess-ment year in which these shares were sold.

I have received an SMS that my returns have been processed by CPC and order under Section 143 (1) will be sent by email. What does it mean?

Bhupinder Singh

An intimation is sent to an individual once the tax return has been processed by the CPC, to intimate the tax payer about any tax and interest payable or any refund due to the assessee.

The author is tax partner & India Mobility leader, EY.  Send your queries to fepersonalfinance@expressindia.com

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