Calculation of Income Tax on Interest of GPF – Issues raised and clarification by DAD (HQ)
रक्षा लेखा विभाग (र.ले.वि.) मुख्यालय
उलान बटार रोड, पालम, दिल्ली छावनी-110010
DEFENCE ACCOUNTS DEPARTMENT (DAD) HEADQUARTERS
Ulan Batar Road, Palam, Delhi Cantt.- 110010
File No.AT/Army/BR/FC/4462/E-1754
Date: 22.02.2022
To,
CDA (IT&SDC)
Mornington Road,
PAO (ORs) AOC Campus,
Triulgherry
Secunderabad-500 015
Subject : Calculation of Income Tax on Interest of GPF – Reg.
Reference : (i) IT&SDC/Dolphin/SysMisc/7cpc dated 21.02.2022 and HQrs Office Letter of even dated 18.02.2022
In continuation to this HOQrs Office letter no. even dated 18.02.2022, the following clarifications are further issued for guidance of CDA(IT&SDC) and for taking suitable action in terms of notification of Income Tax Department dated 31.08.2021 :
| Sl. No. | Issue raised by IT&SDC | Clarification from HOrs Office |
| 1. | The notion behind statement in the HOrs. Letter that “The CBDT notification mentioned above may be implemented wef 01.04.2022” may please elucidated although guidance/explanation given are for this financial year 2021-2022, starting 01.04.2021. | The CBDT Notification No. 95/2021-Income Tax dated 31st August, 2021 has provided explanations on the provisions of the new notification (Copy enclosed). As per this notification the effective date of commencement of this provision is 01.04.2021 (01.04.2022 is the particular assessment year date for the Financial Year 2021-2022). |
| 2. | Is this action of arriving at and recovery of Income Tax on interest on fund subscription) above Rs. 5,00,000.00 to be carried out in February every year? | Yes, since in the Government pay disbursement mechanism, the pay for 12 months is reckoned wef March to Feb. Hence, the action for recovery of Income Tax on interest generated on fund subscription of Rs. 5 lakhs is to be carried out in the February of the particular Financial Year. |
| 3. | In that case, the action to be taken on the part off PAOs in respect of Final Settlement cases closed during March of a year to the January of subsequent year may please be clarified. | The final settlement cases will also have to be regulated accordingly in terms of the provisions of the Gazette Notification of Income Tax Department dated 31.08.2021 |
| 4. |
A statement under Rule 2 Explanation (b) goes “…as reduced by the withdrawal, if any from such account; and…”. In this regard, although the fund subscription exceeding Rs. 5, 00,000.00 and corresponding interest thereon, can be shown separately, the withdrawal, if any by the individuals is from his single fund account only.
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The said withdrawal will have to be in accordance with clause 2 of Rule 9D of Notification] No.95/2021 dated. 31.08.2021. keeping separate account within the Provided Fund account during the previous year for Taxable contribution and non Taxable contribution by the personal |
2. The CDA (IT&SDC) is advised to take action as per clarifications given above and duly taking into account the provisions of Income Tax Notification dated 31.08.2021, regulating the interest on contribution beyond Rs. 5 lakhs in the Financial Year 2021-2022 to be adjusted in the month of February, 2022. The calculation worked out and forwarded along with letter dated 21.02.2022 may be accordingly dealt with in terms of ibid rules.
Sr. Jt. CGDA has seen.
Sd/-
Sr.Accounts Officer(Pay & Allowances)
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