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PF Contribution Exceeded Limit: Additional Tax Liability?

T S Khurana |436 Answers |Ask -Follow

Tax Expert - Answered on Sep 04, 2024

A certified management accountant since 1993, T S Khurana is a fellow member of The Institute of Cost Accountants of India. His areas of expertise are income tax, specifically litigation cases, and GST.

Since the last 21 years, he has also been providing expert advice on financial matters, including investments and diversification of funds, and wealth building in the long term to his clients.
He believes that investment in real estate is the safest way for better returns and wealth generation over a period of time.

A former chairman of the Chandigarh Chapter of Institute of Cost Accountants of India, T S Khurana has also served as member of its technical committee.... more

Asked by Anonymous - Aug 28, 2024Hindi

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Hello Sir! My PF contribution (including VPF)exceeds the 2.5 lakhs limit meant for a private sector employee for tax exemption on the interest earned. Interest earned on the excess amount above 2.5 lakhs, has been taxed at 10% by the PF authorities. Do I have an additional tax liability on the interest earned (under income from other sources) as my tax bracket is 30 percent?

Ans: 01. PF authorities can not tax you in any way. They may have deducted some amount as TDS. While filing your ITR declare this excess amount of Interest, pay income tax on the same & also claim TDS credit, if it has been deducted by any authority.
Most welcome for any further clarifications. Thanks.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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