How is a payment from the Public Provident Fund to the account holder treated under the Income-tax Act, 2025?
Question and options
How is a payment from the Public Provident Fund to the account holder treated under the Income-tax Act, 2025?
Excluded after five years of continuous service
Taxable on the interest portion
Excluded from total income
Taxable as income from other sources
Answer and explanation
Schedule II (Table item 3) of the Income-tax Act, 2025 excludes from total income any payment from a provident fund set up and notified by the Central Government, which covers the Public Provident Fund. The five-year continuous-service condition belongs to withdrawals from a recognised provident fund maintained by an employer, not to the Public Provident Fund.
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