Calculation of Income Tax on Interest of GPF on contribution above Rs. 5 Lakhs
Defence Accounts Department (DAD) Headquarters
Ulan Batar Road, Palam, Delhi Cantt — 110010
AT/Army/BR/FC/4462/E-1754
Dt 18/02/2022
To,
The CDA(Fund) Meerut
PCDA(O) Pune
All Regional PCsDA/CsDA
CDA(IT&SDC)
PCDA Navy
PCDA(AF)
Subject: Calculation of Income Tax on Interest of GPF- Regarding.
Please refer MoF Department of Revenue(CBDT)’s notification No.95/2021/File No. 370142/36/2021-TPL dated 31-08-2021(Copy enclosed) regarding deduction of Income Tax on interest of GPF subscription over Rs. 5 Lakhs during the financial year 2021-22.
2. The provisions of notification and action there of:
(i) Exercising the powers conferred by the first proviso to clause(11) of section 10 and first proviso to clause(12) of section 10 read with section 295 of the Income-Tax Act, 1961(43 of 1961), the CBDT has inserted a Rule 9D namely Income-tax(25th Amendment) Rule 2021 after Rule 9C of Income-tax Rule 1962 which stipulates Calculation of taxable interest relating to contribution in a provident fund or recognized provided fund, exceeding specified limit of Rs. 5 Lakhs.,
(ii) The interest earned on contribution above Rs. 5 Lakhs during FY 2021-22 should be treated as income from other sources for the FY 2021-22(AY 2022-23) and income tax should be deducted from salary paid during the FY 2021-22 itself. Same should be reflected in Form-16 of Fy 2021-22(AY 2022-23) accordingly.
(iii) Action on the part of DDO & Fund manager: Deduction of tax will be done by DDO in consultation with fund manager and where Fund manager and DDO are separate bodies the Fund manager will calculate the interest earned on contribution as per ibid rules and inform the DDO for adjustment of tax deduction from the salary of concerned individual
The CBDT notification mentioned above may be implemented wef 01 April 2022.
This issues with the approval of Addl. CGDA.
Encl: As above
AO (Pay & Allowances)
Encl:- Calculation of taxable interest relating to contribution in a provident fund: Rule 9D of Income-tax Rules, 1962 – IT 25th Amendment Rules 2021
Source: CGDA PDF View/Download
COMMENTS
Sir,
1. It is submitted that I am a serving employee of Indira Gandhi Rashtriya Manav Sangrahalay, Bhopal (an autonomous organisation of Dept of Culture, Govt of India) since 04 th Apr 1994 and was granted Commission in the Territorial Army on 15 th May 1995.
2. I was superannuated from the Territorial Army on 31 Oct 2019 after 10 years, 01 Month, 01 Day of embodied/physical military service (in piece meal) and granted with retiring gratuity by the Principle Controller of Defence Accounts (Pension), Allahabad for military services rendered.
3. It is requested to kindly clarify whether I am eligible for grant of Gratuity by the civil employer i.e. Indira Gandhi Rashtriya Manav Sangrahalay, Bhopal against the services rendering to them.