Treatment of
Recognised Provident fund:
|
Particulars
|
RPF
|
|
1. Employee's/
assessee's contribution
|
Deduction
u/s 80C is available from gross total income subject to the limit specified
therein
|
|
2.Employer's
contribution
|
Exempt up
to 12% of salary. Amount in excess of 12% is included in gross salary.
|
|
3. Interest
on Provident Fund
|
Exempt u/s
10 up to 9.5% p.a. Interest credited in excess of 9.5% p.a. is included in gross
salary.
|
|
4.Repayment
of lump sum amount on retirement/ resignation/ termination
|
The accumulated balance due and becoming
payable to an employee participating in a recognised PF shall be exempt in
the following case in Rule 8 of part A of the fourth schedule
1. In the case of an employee who has rendered
continuous service of more than 5 years or more.
2. In the case of an employee whose service has
been terminated by reason of the employee ill health or by contraction or
discontinuance of the employers business or other reason beyond the control
of employee.
3. In the case of employee who obtains the
employment with any other employee who maintains any recognised Provident
fund to which the accumulated balance becoming due and payable is
transferred.
4. Where the accumulated balance becoming due and
payable is so transferred , the period of service under the former employer
shall also be included in calculating the continuous service .
|