my income is 12 lakh per annum, apart from the bonus. my husband gives me 90,000 per month. Will this amount be taxable in my account? If my husband reduces this amount 50,000, will this reduce my tax liability?
Name withheld on request
As per the provisions of the Income Tax Act, any money or property value received from a ‘relative’ is not deemed to be taxable in the hands of both the donor and the recipient. The definition of the word ‘relative’ for the said purpose includes the spouse of the individual. Thus, any amount received by you from your spouse will not be taxable in the hands of either you or your spouse.
However, it may be noted that as per the provisions of section 64 of the Act, any income accruing to the recipient spouse from the property gifted by the donor spouse shall be clubbed with the income of the donor spouse. may be required, therefore these provisions may also be examined separately.
I have a Provident Fund (PF) account for more than five years. Withdrawal of above amount 50,000 will be taxable from this account?
—Sajid Turki
As per the provisions of section 192A of the Income Tax Act, tax is required to be deducted at source on withdrawal of accumulated balance for an employee who has participated in a recognized Employees’ Provident Fund (EPF), provided such withdrawal is not exempt Is taxed as per prescribed provisions and the total amount withdrawn is 50,000 or more.
Further, as per the provisions of section 10(12) read with rule 8 of Part A of the Fourth Schedule to the Act, the balance in the employee’s account on the date of termination of employment is exempt from tax, if the employee has worked continuously for five years or service with his employer for a period exceeding
It is assumed that you have rendered continuous service for a period of five years or more with your employers (to whom the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 applies) and for a continuous period of 5 years or more have contributed to the recognized EPF for , Thus, the amount withdrawn will be exempt from tax to the extent discussed above and no TDS, or Tax Deducted at Source, should be applicable thereon.
Please note separately that any interest earned from the date of termination of employment till the date of withdrawal will, however, be taxable. In addition, any accumulation and interest thereon to the extent it exceeds the employer’s contribution 7.5 lakhs per annum or accrued interest to the extent it is related to employee contribution over and above 2.5 lakh per annum will continue to be taxable.
Parijad Sirwala is Partner and Head, Global Mobility Services, Tax, KPMG in India.
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