I have withdrawn my Employees’ Provident Fund (EPF) balance in full last year after four years of service. This includes the Employer’s contribution and interest, as well as the employee’s contribution and interest. Tax at 10 per cent has been deducted from the entire amount. How should I disclose all the above components in my income tax return to avoid any complication in future? Can I use ITR 1 for this year?
Except in certain exceptional circumstances beyond the control of an employee, withdrawals made from the EPF account before five years become taxable in the hands of the employee.
The accumulated balance which becomes taxable in your hands has four components as enumerated by you. The employer’s contribution on such contribution has to be offered under the head “Salaries”.
However, the employee’s contribution as well as the full interest accrued on both components will become taxable under the head “Income from other sources”.
You can use ITR 1 to disclose these four components under the respective heads, provided you are otherwise eligible to use an ITR. For example, you cannot use ITR 1 if you have income under the head capital gains and profits, and gains of business or profession.
I am a salaried taxpayer. I opted for the new tax regime while filing my ITR for the assessment year 22-23, and paid my tax accordingly. Now I want to opt for the old tax regime and revise my ITR. Can I do it?
Under the new tax regime, individuals and Hindu Undivided Families (HUFs) can avail themselves of lower tax rate slabs if they are willing to forgo various deductions and exemptions available to them under the old tax regime. So, a taxpayer with business income having opted for the new tax regime can come back to the old tax regime only once, and thereafter, he is not eligible for the new tax regime in future. However, a person with non-business income can exercise the choice every year, but the same has to be done by filing the ITR by the due date. Once the due date of July 31 has lapsed, one will have to file the ITR under the old tax regime.
An individual can revise his/her income tax return any time before the assessment is made, but not later than December 31 of the same assessment year. However, the option to go for the new tax regime opted once cannot be revised for the same assessment year, even for a salaried person, after the ITR has been filed, even while filing a revised ITR. So, though you can revise your ITR for the assessment year 2022-23 but, in my opinion, you cannot change the option from the new tax regime to the old tax regime after you have filed your ITR for an assessment year under the new tax regime.
The author is a tax and investment expert
(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damages caused to any person/organisation directly or indirectly.)
