Section 111: Tax on Accumulated Balance of Recognised Provident Fund

Section 111 of Income Tax Act, 1961 amended by Income tax rules and Finance Act 2022 outlines the tax implications for the accumulated balance in a recognized provident fund based on whether it is included in the employee’s total income or becomes payable in the future. The specific calculations are determined by the rules mentioned in the Income Tax Rules.

Section 111 of Income Tax Act 1961

• 111. (1). Where the accumulated balance due to an employee participating in a recognised provident fund is included in his total income, owing to the provisions of rule 8 of Part A of the Fourth Schedule not being applicable, the Assessing Officer shall calculate the total of the various sums of tax in accordance with the provisions of sub-rule (1) of rule 9 thereof.
• 111. (2). Where the accumulated balance due to an employee participating in a recognised provident fund which is not included in his total income under the provisions of rule 8 of Part A of the Fourth Schedule becomes payable, super-tax shall be calculated in the manner provided in sub-rule (2) of rule 9 thereof.