Recognized Provident Fund:
Employee’s Contribution: Deduction under Section 80C is available.
Employer’s Contribution: Exempt up to 12% of Salary. Thus Contribution made by employer exceeding 12% shall be added to employee’s salary Income.
Interest on Provident Fund: Exempt up to 9.5%. Interest exceeding 9.5% shall be added to employee’s Salary Income
Amount withdrew at retirement time: Exempt subject to certain conditions*.
Unrecognised provident fund:
Employee’s Contribution: No deduction under section 80C available.
Employer’s Contribution: Any amount of contribution is not taxable
Interest on Provident Fund: Not taxable
Amount withdrew at retirement time: Contribution from employer and interest on that is taxable under the head Income from Salaries; Contribution by an employee is not taxable, and employee’s contribution interest is taxable under the head Income from Other Sources.
Statutory Provident Fund:
Employee’s Contribution: Deduction under Section 80C is available
Employer’s Contribution: Any amount of contribution is fully exempt.
Interest on Provident Fund: Exempt
Amount withdrew at retirement time: Exempt
Public Provident Fund: Deduction under section 80C available.
The amount received (including interest) is Fully Exempt.
*Conditions:
- Employee leaves the job after five years of employment; or
- Where the service period is less than five years, the reason for termination is discontinuance of employer’s business or ill health; or
- The balance in RPF is reassigned to RPF with the new employer on re-employment.
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