EPF Corpus Is Taxable If Service Period Is Less Than 5 Years

As far as taxability of the money accumulated in your Provident Fund (PF) is concerned, it becomes taxable if you have not completed five years of contributory service, during which contributions have been made in the account under Rule 6 of schedule XI of Income-tax Act, 2025.

The withdrawal is exempt only in very exceptional circumstances, such as termination of job due to ill health, or closure or discontinuance of the business of the employer or any reason beyond the control of the employee. Since you have not completed five years and do not satisfy the conditions stated above, whatever money you withdraw along with the interest will become taxable in your hand. In case the amount exceeds Rs. 50,000 will be deducted at 10 per cent. Do note that the tax will be payable at the slab rate even though the tax is deducted at 10 per cent.

Under Section 126 of the Income Tax Act 2025, you are entitled to claim an amount not exceeding Rs 5,000 paid towards preventive health check-up within the overall limit of Rs 25,000. For claiming this amount, you just need to submit the bill of the hospital where you underwent the health check-up to your employer in case you are salaried. In case you are self-employed, you just need to claim this amount along with the amount of premium for health insurance while filing your income tax return (ITR). This deduction is not available if you opt for the old tax regime.

I presume that payments for both the flats were made by you and your wife, respectively, and therefore, the rental income in respect of these flats is taxable in your hand as well as your wife’s hand. I also presume that you do not have any other income; so the taxable income under the head income from house property comes to Rs 2.10 lakh after deducting 30 per cent as standard deduction from the annual rental of Rs 3 lakh under Section 24 of the Income-tax Act, 1961 which is applicable till financial year 2025-2026. Since this is below the exemption limit of Rs 2.50 lakh, you are not required to file your ITR.

However in case both the flats are purchased by you from your own funds and just for the namesake one is held in your wife’s name, income in respect of both the flats shall become taxable in your hand and you will have to pay tax and file your ITR, as the income in that case exceeds the basic exemption limit.