Income tax return (ITR) filing: Pay tax on this PF account withdrawal

If I withdraw money from my PF account for buying a house will I have to pay tax on it? Will this tax also be deducted by my employer? Or will I have to pay the tax while filing returns - Sairaj Keshav

The withdrawal amount of an account consists of the investment/principal portion and the interest earned on it. The taxability of the two differs based on the time of withdrawal. If the withdrawal is made before five years of continuous service, the entire contribution made by employer will be taxable and tax would be deducted if it exceeds Rs 50,000. The tax so deducted can be claimed as a credit while filing the return of income. Further, if deduction has been claimed under Section 80C while making such investment over the tenure of service, then the entire contribution will be taxed. Further, the interest earned on both the contributions shall be taxed under the head "Income from Other Sources".
If the withdrawal is made after five years of continuous service, the entire amount including the principal and interest would be tax-free.

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My father wants to give a property to my daughter. Since she is a minor can I rent it out on her behalf? And in whose name will the rent be shown? Will it be in my name? Will I have to pay tax? - Hitesh Pathak
Gift to a relative (including daughter) is not liable to tax. Further, in case of Minor, the income accruing in her hand shall be clubbed in the hands of her parents (whose total income is greater) and accordingly, the parent shall be liable to pay tax on the same.

By: Chirag Nangia
(The writer is Director, Nangia Advisors LLP)

Source: DNA Money