Rent payments to parents may prompt tax control

I worked for company A for two years before joining company B. I left company B only three months after joining company. I have two PF member IDs with a UAN. I would like to withdraw my PF and my pension amount from company A. Am I entitled to withdraw my full pension?

—Zishan Khan

We have assumed that you are an Indian citizen and your KYC has been completed. We have also assumed that Company A is your primary employer.

Regarding the withdrawal of your PF and the amount of your pension from Company A, you will need to submit an online application form. Once the data has been verified and the forms submitted (Form 19 and Form 10C), the withdrawal request will be processed. After verification and verification by the authorities, the accumulations would be credited to your designated bank account.

Note that if you have worked less than six months, the pension contributions cannot be withdrawn because the regulations say that for those who have not yet completed six months of service, the withdrawal allowance is not available. .

Consequently, if you request the withdrawal of your corpus from the PF account of company A and the PF account of company B separately, you will not receive the pension balance on your PF account with company B.

However, if the PF account balance of company A is transferred to the account of company B, the total service will be more than six months and you will also be able to withdraw your pension balance to your account with company B.

Please note that since the cumulative period of service in both companies is less than five years, there would be tax implications in your hands at the time of withdrawal even if you transfer the balance of the PF account of company A to the account of company B.

I am an employee of the IT sector and I stay with my parents in rental accommodation in Madhya Pradesh. My parents own a house in a nearby town. Can I claim HRA for their house while I live in a rental house in another location? I can provide all valid documents such as rent receipts, electricity bill, rental contract, etc.

—Name hidden on request

In accordance with section 10 (13A) of the Income Tax Act, any allowance specifically granted to an employee to cover expenses actually incurred for the payment of rent for accommodation occupied by him is exempt from tax. to the extent prescribed.

Therefore, the main condition to be able to claim the HRA exemption is that the leased property is occupied by you. In this case, it appears that the parental home against which you are proposing to claim the HRA exemption will not actually be occupied by you. In such a case, you will not be able to claim exemption from the rent paid to your mother for this accommodation, which is not occupied by you.

Please also note that any rent payments to relatives may in any case be subject to further scrutiny by the tax authorities.

Parizad Sirwalla is Partner and Head, Global Mobility Services, Tax, KPMG in India.

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