As per Income Tax amendment Law, the Filing of Income Tax Return is not mandatory to an Individual or HUF, if the gross Total Income is below the Basic Exemption Limit. If the Gross Total Income is below than Basis Exemption Limit of each Financial Year i.e. for Financial Year 2012-13 is Rs. 1.80 Lakhs. It means that, if the Assessee/Taxpayee earned Gross Total Income below Basic Exemption Limit is not mandatory to submission of Income Tax Return. As far as the taxability of CPF Accumulation is concerned it may be noted that, in case of withdrawal from the recognized provident fund, the amount is exempt only if it is withdrawn from the PF account maintained for more than 5 years continuously. If it is not so, the amount withdrawn is to be included in the income of that year, and is taxed as per the prevailing income tax slabs / brackets.
The tax treatment of various components of salary normally received by an employee at the time of retirements are as under:
Provident Fund:
Lump sum payment received from Statutory Provident Fund received by the Government employee is fully exempt from income tax u/s 10(12).
Gratuity:
In the case of Government employee, Gratuity amount is exempt from income tax u/s 10(10)(i) of the Income Tax Act- 1961.
Commutation of Pension:
Commuted pension received by a employee who has joined the Central Government before 01.01.2004 is fully exempt from tax u/s 10(10A)(i).
Leave Salary:
In the case of Government employee, any amount received as cash equivalent of leave salary in respect of period of earned leave at his credit at the time of retirement/ superannuation is exempt from tax u/s 10(10AA)(i)
DA/ PENSION:
It is taxable. Even the arrears received is also taxable. However, in respect of arrears, assessee can claim a relief u/s 89(1).
The tax treatment of various components of salary normally received by an employee at the time of retirements are as under:
Provident Fund:
Lump sum payment received from Statutory Provident Fund received by the Government employee is fully exempt from income tax u/s 10(12).
Gratuity:
In the case of Government employee, Gratuity amount is exempt from income tax u/s 10(10)(i) of the Income Tax Act- 1961.
Commutation of Pension:
Commuted pension received by a employee who has joined the Central Government before 01.01.2004 is fully exempt from tax u/s 10(10A)(i).
Leave Salary:
In the case of Government employee, any amount received as cash equivalent of leave salary in respect of period of earned leave at his credit at the time of retirement/ superannuation is exempt from tax u/s 10(10AA)(i)
DA/ PENSION:
It is taxable. Even the arrears received is also taxable. However, in respect of arrears, assessee can claim a relief u/s 89(1).
