For financial year 2019–20, consider the following statements about provident-fund contributions in an employee’s hands:
(A) Employer contribution to a recognised provident fund is not taxable to the extent of 12% of salary as defined for that fund.
(B) Employer contribution to an unrecognised provident fund is not taxed when contributed; its treatment on withdrawal is separate.
(C) Public Provident Fund is an individual savings scheme, not a scheme requiring employer matching contributions.
(D) An employee’s contribution to an unrecognised provident fund qualifies for deduction under section 80C.
Choose the correct combination.
(A), (B), (C) only
A, B and C are correct for the stated year and tax stage. D is false because an employee’s contribution to an unrecognised provident fund does not qualify under section 80C. The employer’s unrecognised-fund contribution and its interest can be taxed on withdrawal. The later aggregate employer-contribution cap introduced for assessment year 2021–22 does not apply to financial year 2019–20.
Important Questions from Deduction and Collection of tax at source
- Identify the person as per Income Tax Act, for whom the Mitakshara School of Hindu law related to succession is applicable to __________.
- Change of Possession of goods from one person to another for some specific purpose is __________.
- Which of the following statements is not correct ?
- Assertion (A) : If the interest is payable outside India, tax must be deducted at source.
Reason (R) : If tax has not been deducted at source, the amount paid as interest will not be allowed as a deduction in computing business income.
Select the correct answer from the code given below : Income received and accrued or arisen outside India from a business controlled in or a profession set up in India, is taxed in the hands of which of the following?
a. Every citizen of India
b. Domicile of India
c. Ordinary Resident
d. Non-Ordinarily Resident
e. Non-Resident
Choose the correct answer from the options given below:
