Tax queries: Income received from provident funds outside India cannot be taxed
23 Jun 2017
Dilip Lakhani, Senior Chartered Accountant, answers queries related to tax from our readers.
When I was worked abroad
for a few years, my PF was deducted from my salary. In FY17, I
transferred my PF savings to India in my savings account. Do I have to
pay tax on this in India in FY17. During
my stay abroad, I paid regular income tax there & while leaving
that country, I had taken full clearance from tax authorities there.
I understand that your status for the purpose of tax was non-resident in the year in which the interest is accrued on your provident fund account.
As the income is accrued and received outside India, the said income
will not be taxable in India, even if you have transferred the PF amount
to your savings account in India subsequently. You will be liable to
pay tax in respect of the income earned in India.
am 56 years old and resigned from my company nine months ago. The PF is
maintained by a private trust of the company. I have not taken up any
further employment. My EPF
corpus is still with my erstwhile organisation. Can my PF corpus
accumulated so far remain with my earlier organisation? If so, until
what period and is the interest earned on it taxable? Can I withdraw the
entire PF corpus as non-taxable? If not, what is the retirement age?
If the PF maintained by a private trust of the company is a recognised
provident fund and you render continuous service for more than five
years, then the accumulated balance withdrawn from PF including interest
thereon will be exempt. If the PF is not recognised or the period of
continuous service rendered to the employer is less than five years,
then you will be liable to pay tax.
You will be required to
pay tax on the deduction already claimed us.80C with respect to your
contribution to PF and the interest thereon. Further, the total
employer's contribution plus interest thereon, which was not taxed
earlier, shall be taxable as profits in lieu of salary. For claiming the
amount withdrawn from provident fund as exempt, there is no minimum age
I had purchased an apartment under construction for which the builder collected service tax
and VAT upfront at the time of registration.The property is still under
construction and I have pending installment of 5% via home loan.Will my
payment attract GST?
With respect to residential property under construction, any
instalment which will be paid after the implementation of GST, you will
be liable to pay GST at 12.5% as per the proposed applicable rates. In
case you make the payment of balance 5% before 30 June 2017, you will be
liable to pay service tax of 4.5% on the amount paid in June 2017.