The new taxpayer-friendly portal has been integrated with the immediate processing of Income Tax Returns to issue quick refunds to the taxpayers.
This is that time of the year when everyone is busy filing their Income tax return (ITR). As the due date is approaching, it is important to file the income tax return (ITR) before September 30, 2021.
Before filing the ITR for the Assessment Year 2021-22, let us understand if the retirement benefits like Provident Fund and Gratuity are taxable or not.
The Income Tax Department has mentioned that in the hands of a government employee Gratuity and PF receipts on retirement are exempt from tax. In the hands of the non-government employee, gratuity is exempt subject to the limits prescribed in this regard and PF receipts are exempt from tax if the same is received from a recognised PF after rendering continuous service of not less than 5 years.
The I-T department has also mentioned that with effect from the Assessment Year 2022-23, no exemption shall be available for the interest income accrued during the previous year in the recognised and statutory provident fund to the extent relates to the contribution made by the employees over Rs 2,50,000 in the previous year.
However, if an employee is contributing to the fund but there is no contribution to such fund by the employer, then the interest income accrued during the previous year shall be taxable to the extent it relates to the contribution made by the employee to that fund in excess of Rs. 5,00,000 in a financial year.
The arrears of salary are taxable. However, the benefit of spread over of income to the years to which it relates to can be availed for the lower incidence of tax. This is called as relief u/s 89 of the Income-tax Act.
However, the pension income is taxable as salary income. But the pension received from the United Nations Organisation is exempted. Similarly, the family pension is not taxed as salary income. It is taxable as income from other sources.
However, the pension income is taxable as salary income. But the pension received from the United Nations Organisation is exempt. Similarly, the family pension is not taxed as salary income. It is taxable as income from other sources.
