I superannuated from a PSU having own recognised PF trust in Feb2020 after 35 yrs of service.However the PF accumulations were withdrawn after 3yrs in feb 2023. The trust has deducted TDS on interest u/s194a. Please confirm whether
- I can claim exemption u/s10(12) for interest component?
- Whether i should report PF accumulation withdrawal in ITR2? If yes then how the same is to be reported? In schedule EI?
As per Section 10(12), interest on the contribution made by the employee to the ‘Recognized Provident Fund’ is exempted, provided contribution made by the employee does not exceed ₹5,00,000 in any previous year in that fund. In case your employer is also participating in the contribution the limit is ₹2,50,000.
Since TDS is deducted on the interest part, interest is taxable.
You should report the PF withdrawal under Schedule EI under section 10(12)
Thanks for the clarification.