tds on interest by provident fund authority

TDS 1127 views 1 replies

An ex-employee continues to remains the member of Recognized Provident Fund gets credit of interest on the accumulated balace in the fund. he is no more in employement with any employer .The point for reply is as follows:

1) Whether provident fund authority requires to deduct the tax on accrued interest ?

2) Whether the ex-employee is liable to include interest income along with other income in his return ? If Yes;Whether such interest will be chargeable under the head "income from salary" or "income from other source" ?

Replies (1)

1. Interest on recognised provident fund are outside the purview of tds.

2. Interest income on employee own contribution are taxable under other sources, while employee contribution was getting rebate under chapter-via u/s. 80C. Employer contribution & interest thereon are taxable under head salary. However relief is avaibale u/s. 89 of incoem tax act, 1961.


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