Filing of Income Tax Return (ITR) for AY 2021-22: Are retirement benefits such as PF and tips TAXABLE? Know here

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It’s that time of year when everyone is busy completing their income tax return (ITR). As the due date approaches, it is important to file the income tax return (ITR) before September 30, 2021.

Before filing the ITR for the 2021-2022 valuation year, let’s understand whether pension benefits such as contingency fund and bonus are taxable or not.

The Income Tax Service mentioned that in the hands of a government employee, the retirement bonus and receipts are tax exempt. In the hands of the non-government employee, the gratuity is exempt subject to the prescribed limits in this regard and the PF receipts are exempt from tax if they are received from a recognized PF after rendering continuous service of at least 5 years.

The IT department also mentioned that as of tax year 2022-23, no exemption will be available for interest income accumulated during the previous year in the provident fund recognized and statutory in the as far as relates to the contribution made by employees over the course of Rs 2.50,000 the previous year.

However, if an employee contributes to the fund but there is no contribution to this fund by the employer, then the interest income accumulated during the previous year is taxable insofar as it relates to to the contribution made by the employee to this fund in excess of Rs. 500,000 in a financial year.

Payroll arrears are taxable. However, the advantage of income averaging over the years to which it relates can be used for a lower tax incidence. This is called a u / s 89 relief from the Income Tax Act.

However, pension income is taxable as salary income. But the pension received from the United Nations is exempt. Likewise, family pension is not taxed as wage income. It is taxable as income from other sources.

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However, pension income is taxable as salary income. But the pension received from the United Nations is exempt. Likewise, family pension is not taxed as wage income. It is taxable as income from other sources.


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