Provident Fund

Tax Treatment are as under

Particulars	SPF	RPF	URPF	PPF
Employer's Contribution	Not taxable	Exempted up to 12% of Salary (here, salary means Basic + DA # + Commission as a fixed percentage on turnover	Not taxable	Not Applicable
Employee's Contribution	Eligible for deduction u/s 80C	Eligible for deduction u/s 80C	Not eligible for deduction u/s 80C	Eligible for deduction u/s 80C
Interest	Not Taxable	Exempted @ 9.5% p.a. (Interest rate), any excess interest will be taxable as salary.	Not Taxable	Not taxable
Lump Sum withdrawal	Not Taxable	Not taxable (Subject to Note)	See Note	Not taxable

# D.A., forming part of retirement benefit, only to be considered.

Notes

Lump sum amount withdrawn from URPF

Particulars	Tax treatment
Accumulated employer's contribution	Fully taxable under the head Salaries
Accumulated employee's contribution	Not taxable
Accumulated interest on employer's contribution	Fully taxable under the head Salaries
Accumulated interest on employee's contribution	Fully taxable as income from other sources

Lump sum amount withdrawn from RPF
Amount withdrawn from RPF is not taxable, provided

i) Employee retires or terminates job after 5 years of continuous service; or

ii) Employee retires or terminates job before 5 years of continuous service:

a. by reason of ill health; or

b. by reason of contraction or discontinuance of employer's business; or

c. any other reason beyond the control of employee.

In any other case, amount withdrawn shall be taxable as in the case of URPF.

Transferred Balance (Conversion of URPF to RPF) [Rule 11(4) of Part A of the Fourth schedule]
An organisation maintaining URPF, may later get recognition from Commissioner of Income tax. In such case, the accumulated balance under URPF shall be converted to RPF. Tax treatment of such transferred balance will be as under:

Calculation is made of all sums comprised in the transferred balance that would have been liable to income tax if the recognition of the fund had been in force from the date of institution of the fund. However, in case of serious accounting difficulty, the Commissioner may make a summary calculation of such aggregate.

Such aggregate sum is deemed to be the income received by the employee in the previous year in which the recognition of the fund takes effect.