Should I disclose my PF payout while filing income tax returns?

I have received Rs 1 crore in the form of PF payout at the time of retirement. Is it mandatory to show it while filing the ITR? If so, where should I show it? - Anonymous

Yes, you need to. Even though your PF (provident fund) corpus is tax-exempt, you must disclose the payout when filing your ITR (income tax return).

Why so? In case you decide to invest the corpus, any income earned by investing it may be taxable. And if you haven't disclosed the source of your investments while filing your ITR, the unexplained income may attract unnecessary hassles or even a penalty.

So, where should you declare the PF payout? Any tax-exempt income must be mentioned under 'Schedule EI' on the ITR form, which provides information on tax-exempt income. Upon disclosure, such income will automatically be excluded while computing your tax liability.

Also read: Is PF withdrawal taxable?

This article was originally published on July 03, 2024.