I am unemployed during FY 2019 to 2020. I had no salary income, I had my PPF account got matures during this year. I have own house as well as second house which is on rental. 

Which ITR form to be used for filling return. Also where PPF mature amount to be shown?

Ans: ITR-1 should be filed for the (AY 2021-22). The PF withdrawn should be shown as part of exempt income under Section 10(12) of the income tax return in case of recognised provident fund (assuming that you have been in employment for over 5 years).

Ans: It's commendable that you've diligently managed your finances, ensuring compliance with tax regulations even during periods of low income. Now, as you prepare to withdraw your EPF and face the prospect of paying taxes on the interest earned since 2018, it's crucial to navigate this process smoothly.

When filing your returns for the current financial year, you can mention the interest earned on your EPF under the appropriate section of the Income Tax Return (ITR). Typically, this would fall under the "Income from Other Sources" section of the ITR form. Ensure to accurately report this income to maintain compliance with tax laws.

Remember, tax compliance is essential for financial well-being, and seeking guidance from a Certified Financial Planner can provide clarity and peace of mind during such transitions. Your commitment to fulfilling your tax obligations reflects your responsible approach towards financial management.

Ans: When filing your Income Tax Return (ITR-1) after retirement, you'll need to account for your income from Provident Fund (PF) and Gratuity. Here's how you can handle these components:

Provident Fund (PF):

• PF withdrawals are taxable if you have not completed five years of continuous service. However, if you've been employed for five years or more, PF withdrawals are tax-exempt.
• If your PF withdrawal is taxable, you should report it under the head ‘Income from Other Sources’ in your ITR-1 form.
• If your PF withdrawal is tax-exempt (due to more than five years of continuous service), you don't need to report it in your ITR as taxable income.

Gratuity:

• Gratuity received by an employee on retirement is exempt from tax up to a certain limit as per the Income Tax Act.
• The exemption for gratuity is calculated based on the formula: (15/26) * (last drawn salary) * (number of years of service).
• The maximum exemption limit for gratuity is Rs 20 lakh, as per the latest tax laws.
• If the gratuity amount you received is within the exemption limit, you don't need to report it in your ITR as taxable income.
• However, if the gratuity amount exceeds the exemption limit, the excess amount is taxable and should be reported under the head ‘Income from Salaries’ in your ITR-1 form.

Here's how you can report these incomes in your ITR-1 form:

• If both your PF withdrawal and gratuity fall within the exemption limits, you don't need to report them in your ITR-1 form.
• If any part of your PF withdrawal is taxable, report the taxable portion under ‘Income from Other Sources.’
• If any part of your gratuity is taxable (i.e., exceeds the exemption limit), report the taxable portion under ‘Income from Salaries.’

Remember to keep all relevant documents, such as Form 16, PF withdrawal statement, and gratuity payment details, handy while filing your ITR. If you're unsure about any specific details or calculations, consider consulting a tax advisor or chartered accountant for personalised guidance.

Ans: ITR 2