ITR filing 2023: Reporting rule for Provident Fund income on contributions over Rs 2.5 lakh

 


Reporting of Provident Fund Income in ITR for AY 2023-24: Income on which exemption is not available has to be reported separately.

Reporting of Provident Fund Income in ITR for AY 2023-24: Income from contributions over Rs 2.5 lakh into the Employees Provident Fund (EPF) or any other recognised provident fund account is taxable since 2021.

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According to experts at Taxmann, taxpayers have to separately report the interest accrued in Provident Fund to which no exemption is available.

“ITR forms seek separate reporting of interest accrued on Provident Fund to which no exemption is available,” experts say.

According to Finance Act 2021, no exemption is allowed in respect of interest income accrued during the previous year in the provident fund account on contributions over Rs 2.5 lakh. This rule is effective from April 1, 2021.

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Interest income from PF account on contributions over Rs 2.5 lakh is taxed under the head “income from other sources”.

“The Finance Act 2021 has amended Sections 10(11) and 10(12) to provide that no exemption shall be allowed in respect of interest income accrued during the previous year in the recognised and statutory provident fund to the extent it relates to the contribution made by the employee exceeding Rs. 2,50,000 in any previous year on or after 01-04-2021,” experts at Taxmann say in FAQs on ITR filing.

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“The interest income accruing in respect of the employee’s contribution over Rs. 2,50,000 shall be taxable under the head of ‘income from other sources’. However, if such a person has contributed to a fund in which there is no contribution by the employer, the limit of Rs. 2,50,000 shall be increased to Rs. 5,00,000. The method for the computation of such interest income has been prescribed in Rule 9D,” they add.

The due date to file Income Tax Return (ITR) for Assessment Year (AY) 2023-24 is July 31, 2023 for taxpayers whose accounts don’t need to be audited. Experts say it is important to file ITR as soon as possible before the due date to avoid a last-minute rush and receive refunds early.

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