Tax on Provident Fund Withdrawal
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Got the following question in an email which Gurpreet responded to.
I have changed job and new employer has opened new PF account. I have a choice of withdrawing old PF amt or transferring to new.
If I withdraw PF, will it be treated as taxable income? If yes, can I save tax by investing partially in any government schemes / bonds?
Here is the response.
PF withdrawal is taxable if a person has worked in the company for less than 5 years. Tax cannot be saved even by investing in any govt schemes / bonds. It just gets added to income from salaries, and then the taxability will depend upon the Gross Income of the assessee.
| Head | Statutory PF | Recognized PF | UnRecognised PF |
| Employers contribution to PF | Exempt from tax | Exempt up to 12% of salary (Basic +DA) | Exempt from tax |
| Deduction under sec 80C | Available | Available | Not available |
| Interest credited on PF account | Exempt from tax | Exempt up to 9.5% | Exempt from tax |
| Lump sum payment received at the time of retirement or termination of service | Exempt from tax | Exempt from tax: | Only employees share of contribution is exempt |
| a. If the employee has worked for at least 5 years with the employer | |||
| b. If the service is terminated on account of ill-health or by contraction or discontinuance of the employer’s business or any other reason beyond control of employee | |||
| c. If the employee transfers the balance in his PF to his new PF a/c maintained by his new employer |
Any thoughts on this – has anyone done this?
One point I need to add is for EPF to be tax exempt it needs to be in continuance for 5 years. In case, once changes his employer midway, for calculation the said 5 years, the period of employment with the earlier employer will also get counted.
Thanks for the pointer Vishal – I got an email about this in the morning.
Can you please provide answer for my query.
I changed the job from Company A to Company B after 3 years. And I selected the option of transferring the PF from A’s account to B’s account.
1. After another 3 years (so total 6 years), I resign and plan to withdraw the total PF. Is it taxable?
2. If yes, is it on the total or A’s amount or B’s amount.
3. If I resign from the company after one year (so total 4 years), but applied for PF withdrawal only after one more year (so after 5 years), will it be taxed.?
4. If yes, is it on the total or A’s amount or B’s amount.
5. Is there any difference between the taxation rules or interest rate calculation between EPFO and PF Trust.
Thanks in Advance,
Shinoj
Shinoj,
Following r the answers :
1. Amount withdrawn is not taxable.
2 & 4 . In case, it was taxable, then it would be the amount withdrawan. Since, you transferred ur PF from A to B, hence the withdrawal cannot be bifurcated between A & B. Taxable amount is the amount withdrawan.
3. Even though you apply after 1 year, it will still be taxable, as you worked with the employer only 4 years.
5. Can you please elaborate on ur point 5 as I’m not sure abt this???
I hope ur queries are answered to certain extent….
Hi Gurpreet,
Thanks a lot for your comments. It was helpful.
Regarding Point 5, they are two different types of PF entities. I think the following links better explain them.
http://www.citehr.com/305664-difference-between-epfo-pf-trust.html
http://www.citehr.com/95611-why-pf-trust-better-than-epf.html
Thanks,
Shinoj
I have a small query.
I shifted my job from a pvt MNC(after serving for almost 3 yrs) to govt.
In private there was PF and here in govt there is NPS tier 1.
So only option I had was withdrawal of the PF amount.I did withdraw.So as such this amount is taxable?
But considering the fact that I didnot have any other alternative(since govt now does not offer PF only NPS for new joinees) so is there any special clause that could probably help in avoiding the tax liability…
Kapil,
Unfortunately the amount withdrawn will be taxed, as presently there is no clause covering the cases as encountered by you.
thanks,
gurpreet
This is an interesting situation – I hope they do something about it.
Yeah Manshu,I too hope they should do something about it..any ideas where to appeal for it..coz I don’t know how many people fall under my category but sure there should be a gud number…..
Hoping for something to happen
No, not really.
Thnks Gurpreet for the reply..
What are Statutory PF, Recognized PF and UnRecognised PF?
I worked for 3 years in a Central Govt Organization. If I choose to withdraw PF, will it be taxable?
According to my understanding, it should not be taxable because we used to pay tax on PF amount as a part of our yearly income.
Avneep,
Are you sure that you paid Tax on your PF deductions. Can you please confirm that. As PF is deducted from our salary and becomes a part of our investment. And tax cannot be deducted/charged on such investment. Please let me know, if I’m missing something.
thanks,
gurpreet
Thanks for answering these questions Gurpreet!
Hi Gurpreet,
As per govt rule, PF is a part of our yearly 1L saving. So assumed not taxable.
But in other way it is taxable if somebody PF contribution is more than 1L.
Actually we r paying tax on it already.
Total PF contribution is always sum of Employ + Employer contribution = Y. This amount Y is considered as saving under section 80C.
in another way we can say if a X person invest 1L in Tax saving Funds then Y amount will be completely taxable.
So we had already paid tax on PF. It should not be deducted again on withdraw.
I am not sure about Interest part. May be it is taxable. please provide your valuable comments.
Reg
Avneep
Avneep,
firstly, apologies for the late response, as I was busy on personal front.
Secondly, only Employee’s contribution to PF is considered for Tax deduction.
coming to ur point that PF is taxable. It is not, as the limit is defined for investment in PF. Assume a situation in which no limit is defined : A person earns Rs. 5 lacs annually. If he invests more than Rs 1 lac in PF or any other investment then he’s not left with much money to sustain his daily chores, e.g. fooding, electricity, telephone, transport etc. The point here is the person should invest for future and is also left with enough money after such investment to sustain his life style.
Regarding interest, it is already covered in the above table.
I hope this clarifies some doubts. Let me know, if not
Thanks,
gurpreet
Hi Gurpreet,
Thanks for your reply.
1> In Central Govt, Employee + employer contribution in PF is considered for Tax deduction. You are right, when we talk about privet sector, where only Employee’s contribution to PF is considered for Tax deduction 🙁
2> I am not convinced from your answer. we must be more logical. Question is “whether Tax is already deducted or not? ”
If we think logically,
1> PF contribution is a part of our yearly income.
2> we have to pay tax on our yearly income.
3> Saving under 80C is just a facility provided by the Govt. If today, Govt will remove this, then we have to pay tax on PF contribution also.
According to me we are already paying tax on PF contribution. So it must not be taken again on Withdrawal of it.
Thanks for your point on Interest part. The table is really very helpful. Thanks.
regards
Avneep
Avneep,
If you see, when we compute taxable income, we remove the PF portion from our income, and then compute Tax.
So, in a way, these things do not get added while computing tax, and hence these are taxed at the time of withdrawal.
Similar is the case with FD’s. When we invest in them these are considered in 80C. However, if we withdraw before their maturity, these are taxable.
Regards,
gurpreet
Hi Gurpreet,
You must be talking about Old Pension Scheme. The same is followed in privet sectors also.
But in new pension scheme, NPS, the complete amount “Employee + Employer” contribution in PF is considered for 80C. it is not deducted from net amount of salary. It is always taxable. thats why at the time of withdrawal it should not be taxable.
FDs are different than PF.
regards
Avneep
Avneep,
Yes, ur correct, indeed in NPS both employer and employee contributions r considered for deduction, but under sec 80CCD. Also, they are exempt from tax upto 10% of the salary (employer and employee both are allowed a maximum exemption of 10% each)
thanks,
gurpreet
Good Info… BUT what about Voluntary Contribution?
CONTRIBUTION TO RECOGNISED PROVIDENT FUND(VOLUNTARY)( U/S 80C )
Kindly guide on same too…
chirag
Chirag,
Please check the following link. I think it covers most of the aspects of the RPF. If you still need some more clarification, please DO let me know.
thanks,
gurpreet
http://www.bajajcapital.com/gss/ppf.html
Dear Gurpreet,
thanks for the respond…
BUT i think there is some misunderstanding… i am not asking for PPF part, i am asking for Voluntary Contribution in the co.’s PF.
let me explain it,
by default 12.33% of basic is deducted as a PF from the salary of an employee and same amount will also be added by the employer and will be credited to employee’s PF account.
now in addition of above am employee is also contributing some 10% of his salary in the PF and for this employer don’t have to add any counter part, but employee will get same interest which he will get in his official PF deduction.
now the question is how to distinguished the interest of both kind of contribution? and whether any tax is applicable on this contributed PF which is additional from default 12.33% of basic of salary?
Chirag,
Employee’s contribution is considered for tax deduction. So, if an employee is contribution 20% of his salary towards PF, then the entire 20% will be considered as an investment, and the employee can claim the same u/s 80C.
As regards employer’s contribution, it is Exempt from tax upto 12% only. If a employer is also contributing 20% then the employee will have to pay tax on 8% contribution made by employer.
Also, the PF deduction is 12% and not 12.33% .
thanks,
gurpreet
Thank YOU Very Very Much for all the answers and also putting efforts to get additional info…
just gr8!
Hello,
I have worked in my previous company for 3.6 years. I have good amount of PF and I have withdraw it.
Now question is should it be taxable?
if yes then how much tax I need to pay? and How?
Please advise.
Thanks,
Keval
Keval,
PF will be taxable on such withdrawal.
Tax will be deducted at source itself, you don;t have to worry abt that….the authorities will do the needful
thanks,
gurpreet
Gurpreet,
If tax is deducted at source itself in the case of PF withdrawal then how do we show the amount which we get as part of this withdrawal in our IT returns ..there again we will have to show it as other income which becomes taxable again…
And if the authorities deduct tax at source then based on what slab they will deduct?
How will they know which slab a particular employee will fall in?
What I believe is we add it in taxable income and then see which slab we fall in according to total taxable income and then pay tax on the corresponding slab….
Pls guide….
Kapil,
for withdrawing our PPF, there is no specific tax rate defined in the IT tax i.e TDS rate. When one applies for withdrawing PPF to his previous company, the company may deduct TDS on the higher rate or could take the last drawn salary as base.
I’m not too sure about this as this is a very practical example and a person employed in payroll dept will be the one who can answer this query. But, my personal opionion is that the companies will deduct TDS at the higher rate on the safer side, and the assessee can claim excess TDS as refund in his IT return.
The assessee will show gross amount (Amount received in hand + TDS deducted) under the head “Salaries” and then compute tax. Whatever the tax liability is, the deducted TDS will reduce the tax liability, and balance tax will be refundable/payable.
I hope this answeres ur query, if not, pls do let me know.
thanks,
gurpreet
Gurpreet,
I got your point but still have further query…
In my case I got the amount from the EPFO directly in my bank account..(And I believe it is the same for everyone)..
And the role of my previous firm was just to confirm the documents received from me for the withdrawal and forward them to EPFO..
So in this case how the firm will deduct the tax…
And if they deduct they should have let me known that TDS is already deducted….
Right now my case is I know only the amount I received in my account…Not the TDS if any…..
Kapil,
You’ll hv to ask ur company to provide u a certificate for the same or Form 16, as otherwise indeed it is very difficult to say that how much TDS was deducted or any TDS was deducted was not…
regards,
gurpreet
Hi, I recently withdrawn my PF after resigning from service before 5 yrs. I want to know, does EPFO deduct TDS before settling the amount or i need to show while filling income tax returns, and if need to show how much portion of PF will be shown under taxable income?
Thanks and regards,
Gitesh
Thanks all for ur comments.
I have the same doubt as Kapil have.
Withdrawal amount is directly credited to ur account and now it is up to us that we will pay the tax for this amount or not…
I dont think so that Tax deducted at source and rest of amount will be credited to link account.
I am still confused… do post your comments……..
Have confusion abt PF withdrawal….have resigned before completion of 5 years…..few months was remaning……but if i withdraw the PF after completion of 5 yrs. will it be any deduction on pf amt or i will be getting it complete amt.
I worked with my previous employer for around 4 Years.
1. Can I withdraw whole accumulated PF from previous employer for a under construction house?
2. Will it be taxable?
Thanks alot – your answer solved all my problems after several days sturgnglig
Hi,
I left my first company after 3.3 yrs.Opted for PF transfer in next company but due to some problem it cannot be transferred.
Now, i want to withdraw PF of my first company & my PF account is almost Five years .
Is now PF withdrawn would be taxable.
Thanks
Shweta
I have left my company after 4.11yrs of service. I have opted for a PF withdrawal and can you please tell me if the total amount of PF is taxable or only the employee contribution of it is taxable??
Hello, I moved from one Mumbai company to another in 2008. I requested my old PF be transferred to new account my new company created. I inquired in 2009 again at EPF office to know they have no track of application.
I submitted again new application in 2009; this time i kept a xerox of it with a received stamp from EPF office. Again in 2010 I checked to find out they have no clue of the application or it’s status. When I showed them the xerox, he told that there is no response from Mumbai EPF office.
Suggestion from you all:
1. Is there any way to fast track the transfer process?
1. Would you all recommend I withdraw my old EPF amount and invest it in NPS or KVS? (since EPF office would stop adding 8 or 8.5% interest to it now)
2. If I withdraw it, would it be taxable since I has worked in Mumbai company for 3 years and it has been already 3 more years after I left it.
Many thanks.
I had joined company A in Sept 2005 and resigned on 31 st dec 2008. They had their trust and PF amount was retained till 21 April 2011.
I joined another company B on 5 th Jan 2009 who are maintaining PF with Maharashtra State RPF and they had opened a different PF account with state RPF and I am still continuing to deposit PF amount with them even till date.
Now my services is transfered to UP in company B and they are maintaining PF in trust in UP from March 2011 onwards
Company A has deducted the TDS on PF withdrawl from trust on 21 st April 2011 (though amount was reatined with them for more than 5 years) and deposited with authority.
I had withdrawn PF from comany A to buy a property.
I wish to withdraw my fund from Maharastra RPF also.
What can be done to claim refund of tax for withdrawl, can I transfer the withdrawl of comany A to Maharashtra state RPF and then withdraw total amount to claim refund of tax??
Or can I claim exemption on basis of documents of continuity of PF for 5 years(Comapny and Comapny B in Maharashtra) and tax deducted was erroniously
What should be done to avoid tax dedcution from withdrawl of Maharashtra RPF?
Please advise
Hi Rajesh,
The PF withdrawal is taxable when the period of service to a company is less than 5 years. It is not abt how long or latter we withdraw PF, rather in order to claim PF withdrawal as exempt from tax, our tenure of working with the company should be at least 5 years.
In ur case Co A correctly deducted TDS from PF withdrawal.
For co B, if ur tenure has become more than 5 yrs then only ur PF withdrawal will b exempt, otherwise it will be taxable. It does not matter whether PF a/c was relocated.
I hope it answeres ur ques. If not, plz let me know
Thanks,
Gurpreet
Hi Gurpreet,
I am planning to withdraw my PF amount which is contributed by my previous organization, as i have surfing alot on net regarding this issue but there is no satisfying answer, some people says it is taxable if i am not served 5 years on that organization, some people says if PF amount is greater that 1 lakh then it is taxable otherwise not, some people expalins about Recognized PF n UnRecognized PF….
so can you please tell me the satisfying answer that it is taxable or not…??
Is there any change in this rule from 2010 -2011…??
http://employment.feedfury.com/content/47776354-providend-fund-withdrawal-taxable-premature-withdrawal-of-pf-taxable.html
Hi Saurabh,
I hope you’ve gone through the above article and the comments. Just to re-iterate, PF withdrawal is taxable if we resign from the company before serving 5 years. Amount of PF is not a consideration i.e. there is no limit of Rs.1,00,000. Even Re 1 will be taxable if we resign prior to 5 years.
Thanks & Regards,
Gurpreet
Forgive me for asking a very trivial question but this is the first time i will be filing tax. I have withdrawn my PF before completing 5 years in profession, the tax on PF will not be deducted automatically right so how and where am i supposed to highlight the PF money and pay tax for the same?
Hi Nitin,
No probs abt asking the ques….Can u pls share that how ur so sure that tax will not be deducted on the PF withdrawn. Ur PF money will be a part of ur Salary and will b taxed accordingly.
Hope this answer is fine, else let me know if not..
Thanks,
Gurpreet
Hi, I meant it will not be deducted ‘automatically'(at TDS i guess!). Please correct Me, I have got my PF money but tax was not deducted… so do i have to pay the tax seperately for the withdrawn PF? or it was not deducted because my net income for the financial year was not taxable? (my net income was only around 1,50,000)
Nitin,
Firstly, apologies for a late response.
I’m not sure abt this answer but I think looks quite logical:
TDS will be deducted depending upon what salary an individual was drawing. in ur case since u didn’t cross the exemption limit the PF guys didn’t deduct TDS.
Regards,
Gurpreet
But i guess I still have to pay 39% tax for the PF amount I got right?
I’m not sure if 39% i’ve mentioned is correct! and my net income goes beyond the exemption limit if i include PF amount!
Hi Gurpreet
Thanks for posting a very informative article about PF withdrawal. I have couple of questions regarding PF withdrawal.
* I worked in company A for 3 years and joined another company. I have applied for PF transfer which never happened. I rejoined company A after 1 year and worked for about 4 years. I would like to know if PF withdrawal is taxable in this case, if I apply for it now?
* Can you clarify if pension amount is also withdrawable (premature)? I understand that pension is also a component of PF amount.
Can you also clarify if PF withdrawal should be strictly applied only when the candidate is no longer employed?
Hi Jagadeesh,
I think the PF should be taxable since u didn’t work for continuous 5 yrs….u first worked for 3 yrs and 1 yr with some other co and then rejoined for 4 yrs….u didn’t serve continous 5 yrs, hence it should be taxable.
Can u pls clarify abt pension component, as I’m not sure if Co’s deduct something in regards to pension. Let me know if I’m missing something.
Regards,
Gurpreet
Hi Gurpreet
Can you clarify PF withdrawal should be strictly applied only when the candidate is no longer employed?
I have worked at a employer, a bank from 2009 to 2010 and had a PF account. Post that I have changed my job to another employer say another bank and opened another PF account. However I havent transfered the PF from the old account to new.
Now, I want to buy a real estate property and need some cash for the same. My qustions are:
1. Can I withdraw the old PF balance ?
2. Will I be taxed for the same? if yes whats the procedure for tax deduction… Will EPFO directly deduct tax @ 30% or it will upto me to file in my returns
3. Pursuant to question 2… Can my withdrawal be tax free since I am buying a house?
4. Can I withdraw my current PF balance to buy a house?
Thanks in advance.
Hi Kamal,
PF will be taxable if withdrawan before serving 5 yrs of continuous service to the company. Rate of TDS will depend upon ur salary which ur drawing. You can use PF for any purpose but it will be taxable.
Regards,
Gurpreet
Hi,
I have worked in organization A for about 2 years (June 2004 – April 2006) and then took a break of one month before joining organization B in June 2006. I got my PF transferred from ‘A’ to ‘B’. I left “B” in April 2011 for further studies and applied for full withdrawal of my PF. Is the withdrawal taxable? if yes what is the tax applicable on which contribution?
Hi Abhishek,
considering ur case, PF shouldn’t be taxable as in Co A u transferred ur PF and in Co B u worked for 5 yrs….So u can withdraw ur PF..Rate of TDS on PF withdrawal depends upon wat salary u were drawing.
Thanks & Regards,
Gurpreet
Hi All,
Lot of discussions on PF withdrawal on resignations before 5 year completion. Anybody can comment on withdrawal in case of termination of service by employer (due to closure of operations) before completion of 5 year service? I understand this is non-taxable as per PF exemption rules, but do we need to show this withdrawal in the annual IT return?
Regards
Satyashis
Hi Satyashis,
Its always gud to show any income which u’ve recd via Bank A/c (I assume that u’ve recd ur PF withdrawal in the same mode)
Thanks & Regards,
Gurpreet
I server in follwing four companies and transfered the balance as follows:
1. From 2004 to 2005 I worked in Company A
2. From 2005 to 2006, I worked in Company B and did not transfer the PF from A to B
3. From 2006 to Apr 2010 I worked in Company C and transfered the PF of company A and B to company C
4. Currently I am working in Company D and did not transfer the PF balance from company C.
Question – if I withdraw the balance of all the accumulated PF from Company C that maintains the private recognised PF trus, will it attract income tax?
Regards,
Vikash Verma
hi Vikas,
ur case im bit confused…I think it’ll b taxable but let me confirm it from someone else too…so that I’m completely sure….can u pls drop me a mail @ [email protected] and I’ll revert to it at the earliest..
regards,
gurpreet
Hey,
I have given resignation in the first company (joined in 2006) and hence completed 5 years on 14 July’11. I have following queries:
1. If i get it transferred to the next employer trust account, can i withdraw it anytime or it shall be withdrawn at the time of resignation only.
2. If i withdraw right now, will it be taxable?
In general what is better: To get transferred or to get withdraw.
Hi Vikas,
Its always better to get ur PF transferred, as by doing so u can accumulate money as well as avoid Tax…In ur case u can withdraw it as u’ve completed 5 yrs…
regards,
gurpreet
Hi,
what is the rate of tax deducted on PF withdrawal.is it count-part of empolyee salary ? or there is another salb for that.
Hi Narendra,
There is no slab for PF taxation. Its slab depends upon the slab in which ur salary falls in. Since PF is 12% of salary calculation is made to determine wat was ur salary wen PF was deducted and accordingly tax is calculated when u withdraw PF. (i’m not 100% sure abt this answer, but I think this is the only logic in determining rate of tax)
Regards,
Gurpreet
Hi Gurpreet, thax for the response.
Also is the 9.5% interest rate Simple or compunded in PF?>
I hope after 5 years , today it wont be taxable now?
Also in the next company the counter shall start from Zero , right?
Vikas,
PF rate is compounded….and yes in the next co the counter will start from 0 until u get it transferred…
regards,
gurpreet
One last query : In case i get it transferred to new company, Will i be aable to draw at anytime during the service in next company or at the time of resignation only?
Vikas,
for withdrawing PF during ur tenure it’ll b best if u consult ur HR on the same as they will b best to guide u
regards,
gurpreet
hi gurpreet,
i have a question for you.
last year i withdrawn the PF amount for my last employer before 5 years.
i got the pf amount but tds was deducted on that amount as it was withdrawn before 5 years.
the amount was ard 50000 thousand and tds deducted was around 1800.
now for my current employer i already paid all the taxes, but while filling the return 1) is this pf amount be added as income? 2) if yes then instead of paying 1800 as tds on pf amount it is showing that i have to paid more tax on total income, is it true or i m doing some wrong calculations?
Hi Rajinder,
Show the PF amount withdrawan (Gross) in your Salary income. Now compute Tax. Whatever tax u get reduce the TDS already deducted on PF / Salary income. Balance will be the tax payable/refundable.
Regards,
gurpreet
Rajinder,
plz see my reply below to Mr Sharma’s query as well
I hope ur doubt will be cleared
Regards,
gurpreet
Hi Gurpreet,
Recently I withdrew my RPF before completion of 5 years. The amount was a sum of employee contribution + employer contribution + voluntary contribution + the interest. TDS was deducted on the total amount. But when I received form 16 from my employer, only the employer contribution part of the withdrawn amount is shown as taxable income. The rest amount is shown as exempted under section 10. Can I claim refund while filing return? Thanks in advance for an answer.
Hi Sharma,
Your normal Salary income + Employer contr of PF withdrawan = Taxable salary income..
Now compute tax payable on this…..deduct TDS already dedcuted from tax payable…balance is net payable/refundable.
I hope this clarifies the query…if u need more explanation plz let me know
regards,
gurpreet
Hi Gurpreet,
Thanks for a prompt reply. Now it is clear to me. After computing the tax, there is a net amount refundable to me. As TDS was deducted on the total RPF amount, I have claimed refund while filing the return.
Also if only the Employer contribution part of the EPF is taxable, then why should they deduct TDS on the whole amount initially? Its making the whole thing complicated.
Hi Gurpreet,
My question is almost similar to Mr.Sharma’s. I withdrew my PF before completion of 5 years. The total amount is employer contribution + employee contribution + interest on both. TDS was deducted on the total amount. I received a Form 16 from EFP trust of my employer. But, only employer’s contribution and interest on both are shown as income. Employee’s contribution is not shown at all (i.e. not even shown exempt under Section 10). When asked for clarification they said – “the tax will be deducted on company contribution, interest on company contribution and interest on member contribution.”
My question – is employee’s contribution not taxable ? If yes, where should this empoyee’s contribution be shown in IT Returns (is it exempt under 10).
Thanks in advance for your reply.
Hi Viswa,
Indeed its a bit confusing and now even I feel confused, coz I’ve heard the same thing from some other ppl as well…where in cases only Employer contri was taxed and in some case the entire amt was taxed..I think even the PF ppl of individual trusts r confused. It wud b a gud option to contact directly those ppl at the time of withdrawal and get this clarified…
Regards,
gurpreet
Hi ,
I have worked xyz Pvt company 4.10 years. after that i shifed my job currently am working in new company. i have plan to withdraw my previous company PF amount (approx 2 Lac)
1. is it taxable?. if its taxable means how much percentage ?
2. if i withdraw the PF amount after 2 months it will complted 5 years , in that case my PF is it taxable ? but my last company exp is 4.10 years only.
Thanks in advance !!
Regards,
Senthil.
Senthil,
for PF to be exempt either u should get it transferred or ur tenure with the company should be more than 5 years, It does not matter if u withdraw ur PF after 5 years. U should work with that co for at least 5 years.
Thanks,
Gurpreet
Hi Gurpreet,
I worked for company A for 4 yrs and 8 months. Then I joined company B and worked there for 1 year. I transferred my PF from Company A to company B. Now I have resigned from Company B and want to withdraw the PF money. What will be tax implication? Will I be taxed for all amount or just for the one year where I worked with Company B?
Kindly clarify and thanks in advance.
Regards, Kaustubh Khandekar
Hi Kaustubh,
Unfortunately the whole amount is taxable as once u transferred ur PF, it becomes a part of ur new PF a/c (new employer), and again the timeline of 5 years becomes applicable for withdrawing the EPF…
Thanks & Regards,
Gurpreet
Hi,
I think it will not be taxable. Because you served a total of five years.
Shinoj,
Apologies, yes ur correct….it will not b taxable..
regards,
gurpreet
no gurpreet, i think u were correct earlier… I have gone thru some PF tax rules in one TAX book and it clearly stated that the employement should be with the same employer for 5 yrs
Hi Malika,
The IT act says, the PF withdrawal is taxable if it is withdrawn b4 serving 5 yrs of service with the employer….however if u work for less than 5 yrs and get it transferred to ur new employer than it is not taxable…Subsequently if u decide to withdraw it then while calculating the tenure of 5 yrs the employment with the previous employer will also be considered, since u transferred the PF and didn’t withdraw it….
I hope this clarifies…
Thanks,
Gurpreet
Hi,
I worked with company A for 2.5 years & then joined Company B. After joining Company B, I got my company-A PF transferred to Company B pf account.
I resigned from company B after 4 years. Now,I want to withdraw the whole PF. will it be taxable & if yes, at which % rate it would be taxed.
Please guide.
Thanks
Jatinder Singh
Jatinder,
Since u’ve transferred ur PF and now ur total period of service is more than 5 yrs, it will not b taxable…
regards,
gurpreet
Hi,
I have started my career from Apr’2007 and i worked till Dec’2009 for a company A,
I have transfered the PF from A to company B account (I’m working here from Jan’2010) I will continue here till Apr’2012, so if I withdraw PF after Apr’2012 will it be taxable?
FPF is not transfered to current PF account what would be the procedue to do the same?
Thanks in advance,
Nagesh.
Nagesh,
It will not be taxable…for transferring EPF u can contact ur HRD, they’ll let u know the procedure…
thanks & regards,
gurpreet
Dear Sir,
I worked in a company A for 4 Years and 10 Months. I have resigned from this Company A and till date my Full and final settelement has not been made . The details are as follows:
Date of Joing the Company: Aug-2006- PF Contrbution Start Date
Date of Leaving company : May-2011- PF contribution end date
Number of years in service/ PF contribution: 4 Year 10 Months
If i get the Full and final setellemt after PF deduction in the month of Sep,2011, will it be deemed to be contributing PF for 5 years in the same PF trust/ PF Number , so that any withdrwal of PF need not attract Tax Deduction
Hi Guru,
I don’t think that u’ll be deducted any PF after May’11…so technically ur period of deduction of PF is not 5 yrs….hence uless u get it transferred it’ll be taxable (if u withdraw it)..
Regards,
gurpreet
Thnak you so much Gurupreet, Shall apprevciate if you could advice on the following:
1) My Current employer do Not have any PF . They are Proposed to open the PF account some time latter after 6 Months. This mean i am not going to contribute any money on PF for next 9 Months. If i transfer after nine months , then how long should i work to withdraw PF without Any Tax liability
2) For past 4 Months, i am not contributing PF due to the resaon the same PF account is not avialable with current emplyer. My Current PF is with Company Trust in Delhi and In case i change a job in Oct-2011 and transfer the funds to the new Compnay PF account maintained with RPFC, Mumbai, then How long will it take to get the funds transfeered to new PF account from Delhi to Maharastra. How long i should i work with New company so that i can withdraw without TDS deduction
Guruji
Hi Guru,
Since, u’ve already worked/contributed PF for 4 yrs & 10 months, so u need to contribute for 2 more months only, which means, once ur a/c with new employer is opened then after 2 months of contribution ur withdrawal will not be taxable..
Thanks,
Gurpreet
Thnak you Gurpreet for your kind advice. I need some more adivce or clarity from you
The PF in the earlier company is under ” Company Trust” in Delhi . The curent employer/ New employeer is likely to open the PF with Govt RPFC , Maharstra.
1) Will there be any difficulty in getting transfer from Delhi to Maharsta
2) What will be normal time required to transfer from Delhi to MH
3) Is this transefer automatic by default on should i have to run pillar to pillar chase people.
4) How will i get confirmation that PF has been transferred in to my new PF account
Thnaks for your help
Guru
Guru
Hi Guru,
Normally, there’s not much difficulty in getting the transfer….it only takes time (could be months)….so I think for all ur queries consult ur HR who’ll b d Best person in answering these ques…..u won’t hv to chase any people except ur HR….they’ll only confirm once ur transfer is complete
thanks & regards,
gurpreet
I applied for PF withdraw, the claim status is showing it in progressed , when can I expect to in hand OR how long it will take to deliver this amount,
Hi Yoga,
Transfer does take time….i’ve heard that it took even couple of yrs to get it transfer….so not sure abt exact timeline….u can either contact ur earlier PF office (u can take their no from ur previous HR) or contact ur current HR..
thanks & regards,
gurpreet
Hii
I have joined company on 10.4.2006 and transferred to another company on 1.4.11. My new PF a/c has been opened in another company in April 11. Now I want to withdraw my PF balance of earlier account. Will it be taxable. Thanks in advance for reply.
Hi Nitin,
A small clarification : When u joined the new company did u get a new a/c opened for PF…if yes, then did u get it transferred or not…..if u get it transferred then it will not be taxable…..
If u want to withdraw it then it will not be taxable if u’ve worked in ur previous company for more than 5 years…otherwise it will be taxable…
thanks,
gurpreet
I have a basic query.
I am in the process of withdrawing my epf amount.
The epfo office has a facility where I can check my pf balance online. However, the amount shown there seems to be only my part of the contribution. The employers part is not shown.
So please tell me,when I withdraw the amount, will I get only my part of the contribution or both?
It shows 28000. but that devided by the months of service at the employer comes to only 961, which is only my part of the contribution.
And also please tell me if the pension fund also gets withdrawed in the process. If so, is there any employers contribution in this part?
Hi Ankur,
U’ll hv to get in touch with the respective PF deptt as they’ll only tell u that why employer contribution is not showing up….if u withdraw it you should be getting employer contribution as well.
I’m not sure about the pension fund part….apologies for that..
Thanks,
Gurpreet
I have worked with one company in mumbai 2010 for 4 monts after left, now i m in delhi may i cash it, if yes then how, pls help us, if any contact number from i can get more info pls provide us…
Hi Keshav,
You can contact +91-9999995481 / [email protected]
Thanks,
Gurpreet
My question regarding PF is –
1. I have worked for A company for 1 yr and shifted to B and transferred my PF to B. and after working for 3 yrs in B , i resigned. So tell me if i want to claim my PF , Is it taxable?
2. another thing is – if it is taxable ,, so by when should i apply PF to avoid tax deduction.
Hi Manisha,
As per ur details i can see that the total period for which u worked without withdrawing ur PF is 4 years….as per IT act, if u wish to withdraw it it will be taxable..
If u wish to withdraw it without being deducting tax, then you should get it transferred to ur new co as well, and once ur total tenure of contribution to 5 PF becomes 5 years u can get withdraw it..
I hope this answers ur query…
Thanks,
Gurpreet
Thanks u so much for the response .. but right now i am not working anywhere… so it will be the same PF which it is right now.. so what should i do in this case ??
Manisha,
I’m afraid it will be taxable in that case….
Thanks,
Gurpreet
So, what should i do ?? shall i go ahead and claim the PF or shall i wait for next year to complete five yrs.. ?? and how much will be the tax deduction ?
Hi, Please let me know the query .. its urgent …
So, what should i do ?? shall i go ahead and claim the PF or shall i wait for next year to complete five yrs.. ?? and how much will be the tax deduction ? waiting for the reply….
Hi Gurpreet,
I have worked for company ‘A’ for 4 Years and 5 months and shifted to B and working here from 1 Year and 2 months, But I haven’t transferred my PF account from ‘A’ to ‘B’.
Now I want to shift to another company ‘C’, Can I transfer my PF account from ‘A’ and ‘B’ to new company ‘C’.
Please answer my above question.
Thanks
Santosh Pola
Hi Santosh,
Yes, u can transfer ur PF from A to C and from B to C…
Thanks
Gurpreet
I need one clarification regarding tax dedcutions on my PF withdrawal.
1. I joined comapny A on Aug 14th 2006 and worked till Feb 9th 2010. Later joined company B and worked till April 24th 2011. I transferred the PF amount from company A to company B.
2. When I left company B, I submitted the PF withdrawal form on June 22nd to company B.
3. I n EPFO website of ‘to know claim status’ it was displaying that application got received on Aug 3rd and on Sep 23rd the application is approved and payment process under progress.
My question is which date they will consider for completion of 5years? and whether there will be TDS deduction in my case? If they consider application approved date, then there should not be any tax deduction. But need to know which date they consider?
Hi Yashavanth,
I’ve answered ur query via email….if u need further clarification…plz do revert
Thanks,
Gurpreet
I have worked in the previous organisation from June 2008-January 2011.If I don’t withdraw the PF for another two and half years will I get the interest on the PF amount for that period? And also if I withdraw the PF amount after the completion of 5 years will the amount be taxable?
Hi Saurabh,
I’m not sure whether you’ll get the interest for that period or not. I’m not confident abt that…Also, since you’re not transferring that PF and rather waiting for just 5 yrs it’ll be taxable, as you’ll have to contribute to the fund regularly…
Thanks,
Gurpreet
Hi Gurpreet!!
I need urgent help!
I worked in company A for 3 months and then I’m shifting to company B in Nov. I don’t want to tell comapnay B about company A. Can you please tell me what could happen if I do not tell my new employer about my previous PF account (closed but still in the 60 days period) ??
Hi Prateek,
You can simply tell ur new employer that you want to open a new PF a/c and that will be all…..no need to hide it unless ur not showing ur previous experience
Thanks,
Gurpreet
Hi Gurpreet,
I was working with an organization for 4 years which was deducting PF as part of the normal process.Now i have moved to an organization which doesnt come under the RPF category. Ideally i would have wanted to transfer my PF amount from earlier employer to avoid tax but in this case i cant.
My question is what is the time period till we can avoid transfer/withdrawal of PF. Its been a month that i have joined the new organization. The reason i ask this is because my co is hiring employees and within 2-3 months might fall under the PF category. Can i apply for transfer of PF once my new co comes under the RPF purview.
Kindly guide.
Hi CJ,
Yes absolutely you can wait for couple of months and then apply for the transfer of ur previous PF..
Thanks,
Gurpreet
Hi Gurpreet,
I was working in Company A for 2 years. I have transferred my PF when I joined Company B. In Company B I have spent 4 years 10 months. Now I am moving to Company C which doesn’t have EPF , hence want to withdraw PF amount. Is it taxable , if so How much?
~
Amol Agare
Hi Amol,
It will not be taxable
Regards,
Gurpreet
Hi,
I joined company A in jul, 2008 then on jan, 2010 i left it …then after a gap of a few months i joined company B… I wanted to transfer my pf a/c but employer at B said no need of doing this… previous and current pf a/c will get merged… after that i left my job at B on oct, 2010. I did not take any formal resignation from either of the two companies…
1. Did my pf a/cs really got merged?
2. How can i confirm that?
3. How do i know the current status of pf a/c?
4. If i try to withdraw the amount…will it be taxable? if so how much tax will be levied if say the sum accumulated is somewhere between 30k to 35k?
5. I have heard that under current rules no one is allowed to maintain two pf a/c s. if it is true then am i on the verge of being prosecuted?
Hi Kiran,
Foll r my answers to ur queries :
1. PF’s don’t get merged automatically until u get the previouos PF transferred
2. U can confirm that with ur HR
3. Again consult ur HR
4. Since ur working tenure is less than 5 yrs and u didn’t transfer it, it will b taxable if u withdraw it. however if u transfer all ur PF money to ur new a/c it will not b taxable
5. This is not true, at least I hv not heard abt such thing that we cannot maintain 2 a/cs. however I beleive that we cannot open to PPF a/cs. These PF a/c which ur co opens up can be more than 1, as we may switch over other companies.
Regards,
Gurpreet
My question regarding PF is –
1. I have worked for A company for 1 yr and shifted to B and transferred my PF to B. and after working for 3 yrs in B , i resigned. So tell me if i want to claim my PF , Is it taxable?
2. another thing is – if it is taxable ,, so by when should i apply PF to avoid tax deduction..
Right now i am not working anywhere… so it will be the same PF which it is right now………..
what should i do ?? shall i go ahead and claim the PF or shall i wait for next year to complete five yrs.. ?? and how much will be the tax deduction
Hi Manisha,
I’m afraid that it’ll be taxable, as this is EPF and we need to have regular contribution for 5 yrs…In ur case since ur not working anytime u withdraw it, it’ll be taxable.
Thanks,
Gurpreet
Hi,
Thanks , but i just to know , how much will be the tax deduction.. waiting for the reply.
Manisha,
Tax deduction will depend upon your last drawn salary with that co. The corresponding tax slab will be applicable as per the last drawn salary.
Regards ,
Gurpreet
Thanks 🙂
Hi Gurpreet,
I have a small doubt..currently am not working anywhere..i filled up my PF form and got signed with my previous employer..and i kept that form with for more than two years.IS THERE ANY LIMITED PERIOD TO WITHDRAW THE AMOUNT?
waiting for your reply
Thank you
Hi Gurpreet,
If we have worked in a company for 4 years and 8 months and if we withdrae PF will it be taxable. As per the condition it should 5 years of continous service and if you check the law for Gratuity 4 year and 8 months are considered as 5 years of continous service. Does the same rule apply for PF withdrawl.
Hi Sanyog,
Unfortunately in Income Tax, it will not be considered as 5 years.
Regards,
Gurpreet
Hi
Please see my case and tell me if my PF withdrawal is also taxable or not.
Worked in a company for 3 years. PF account maintained in RPF chandigarh office. Resigned to join different company. PF account maintained by Company trust in Bangalore. Withdrew PF from my first company after 2.5 years of leaving the service. i.e. after 5.5 years.
Is PF amount still taxable?
If yes, should the RPF deduct my TDS or it is my duty to show that amount in my return and deposit self assessment tax.
Thanks
Gaurav
Hi Gaurav,
TDS will be deducted on the withdrawal. You’ll need to confirm from ur HR / RPF office that how much is the Gross amount (Net amount received + TDS deducted). That gross amount you’ll show in ur Return of Income and while calculating tax liability you’ll consider the tax deducted on PF withdrawal.
Hope this clarifies.
Thanks & Regards,
Gurpreet
Hi Gurpreet
I tried to confirm the gross amount but I am not sure. I think no TDS was deducted by RPF on the amount that I had withdrawn. Is this the responsibility of RPF to deduct TDS or is it my responsibility to deposit the tax as self assessment tax? There is no entry of payment made to me in form 26AS. Does this mean that my amount was actually not to be taxed because i had made a withdrawal after 5.5 years of my PF a/c opening?
Please tell me what should i do to track the amount of TDS/tax and how to deposit the same, if any. On what amount should i calculate the tax? employee contribution, or employer contribution or complete sum received?
Thanks
I completed 6 years and left on my own to start my own Biz. Will the PF withdrawal be taxed in such a case?
Hi Varinder,
It will not be taxable.
Thanks & Regards,
Gurpreet
OMG so many PF queries/doubts. Just the post that people needed.
Hi,
I worked in one company 5.5 years and I left that company now. Instead of transferring my old PF account amount to new PF account I was planning withdrawal.
Is that PF withdrawal amount will be taxable? If yes, how much % will be the taxable?
If we withdraw PF amount before 5 years of service what will be the tax %?
Thanks and Regards,
Krishna
Hi Krishna,
In ur case it will not be taxable at all…..
cheers
Gurpreet
Hi,
I worked for a company from 2005 to 2006. I joined other companies and I didnt transfer the PF to my new employer accounts. Now I have been advised to withdraw that PF accumulation in my previous employer PF account. I am filling the required forms. But I am wondering can I give the salary account of my current employer & the cancelled cheque in the form? Will it be a problem if I give this salary account? Please advise.
Thanks
Hello Gurpreet,
I have some amount in my VPF account. Is it possible to withdraw for my sister marraige. I have completed 3 years of service.
With regards,
Krishna
Hi,
I just want to know that I am leaving a company after 17 years. There are two component in EPF, employee and employer’s, what amount shall i get? Only employee’s contribution or both employee’s and employer’s?
Please let me know.
Hi Çhintan,
You’ll get both the components along with any interst accrued on.
Thanks
&
Regards
Gurpreet
hi
i have total 5 years of multiplw companies as follows:
a. Apr 2005 to Dec 2006 — 1 year 8 months (leave 4 months for )
b. (private pf fund trust)dec 2006 to feb 2007 1 year 3 months
c. (private pf fund trust)mar 2007 to Apr 2008 1 year
d. (private pf fund trust)Oct 2009 to may 2010 8 month
e. (present company —private pf fund trust)june 2010 till date
till now i have trnsferred my pf til d company. After my e company i want to with draw my pf ammount. I want to know following queries?
1.After completion of 5 years of work with long leaves or gaps can we get pf as non taxable?
2.After my current company when can i get my pf as non taxable ammount?
3.Where can i get the all the pf rules?
Thanks in advance
Rekha
Hi Rekha,
Please find my answers below :
1 & 2. If your company says that leave period is a part of ur job and will be regarded as experience with that co, in that case you 5 years will be complete and the withdrawal amt will not be taxable, otherwise it will be taxable.
3. You can search google as EPF rules.
Thanks & Regards,
Gurpreet
Hi Gurpreet
Thanks for the reply.
a. Apr 2005 to Dec 2006 — 1 year 8 months (leave 4 months for )
b. (private pf fund trust)dec 2006 to feb 2007 1 year 3 months
c. (private pf fund trust)mar 2007 to Apr 2008 1 year
d. (private pf fund trust)Oct 2009 to may 2010 8 month
e. (present company —private pf fund trust)june 2010 till date
In my above work experience i have taken long leave for maternity leave and I have taken break 7 months in my career from apr 2008 to oct 2009.
Even if I want to withdraw my pf in march 2012 will it be taxable?
Thanks in advance.
Rekha
Rekha,
Just going by a simple calculation : from Apr 2005 to Mar 2012 it is 7 years.
Out of which ur break/leave is
1. 4 months
2. Apr 2008 – Oct 2009 = 19 months
Total break = 23 months
So net period is 5 years and 1 month…hence it should not be taxable.
Let me know, if ur able to understand the above calculation or I’ve misinterpreted ur info
Thanks & Regards,
Gurpreet
I am leaving my current job after 6 years of continious service, please confirm me the following :
1. On withdrawal, will that amount be taxed ?
2. I heared that there is a provision which say that, the employee should not join any organisation for 2 months after serving the organisation for more than 5 years, in order to claim the tax free withdrawal amount.
3. If i transfer this amount to other organisation, and from there if i withdraw this for the purpose of buying the flat, will i get that fund tax-free ?
Hi Kannu,
Please see my answers below:
1. No, amt will not be taxed
2. You can withdraw ur PF not b4 2 months of leaving the organisation, (yes, ur correct)
3. ur withdrawal amt will be tax-free, and you;ll need to show in ur Return of Income as disclosure that with the amt withdrawn u’ve purchased a house property.
Thanks & Regards,
Gurpreet
Hi Gurpreet,
I joined company A in Jun 2006 and left on Nov 2008, effectively worked for 2.5 yrs in a reputed MNC in Bangalore (PF account in Bangalore), I think that would mean a recognized PF.
I joined new company in 2009 and still continuing (3 yrs), but in my new company I have opted out of the PF scheme, hence there is no PF here. The PF amount along with the employer contribution is paid to me directly after being taxed.
Now, I checked the balance in my old PF acc epfonline, I want to withdraw the amount and close the pf account. now please tell me, if the pf will be taxable, and to what extent it will be taxed. Since the PF account is currently lying unused since 2008 end, there is some interest deposited, will the tax be on the principal amount or the combined (principal + interest)
Thanks,
MK
Hi MK,
Your PF will be taxable, inclusive of the Intt component.
Thanks & Regards,
Gurpreet
Hi,
I have resigned from the current company and my last working day is 17th Feb 2012. 14th Feb 2012 I am going to finish 5 years in that company. So my service in that current company is 5 years 3 dyas. If I am going to withdraw my PF, is that PF withdrawal amount will be taxable?
Also pl. let me know shall I eligible for Gratuity.
Thanks
Ganesh R
Hi Ganesh,
PF will not be taxable…I’m not sure abt Gratuity…let me check and get back to u regarding that..
Thanks & Regards,
Gurpreet
Yes, I beleive u shold be getting Gratuity
Hi,
I worked with company A for 2.5 yrs (company PF trust) and then got the PF transfered to company B where I worked for 3 yrs (Govt EPF). I joined company C (Govt EPF) for 1 yrs and now I am in company D for the last 5 months. I have neither withdrawn nor transfered from B and C. Pls suggest whether withdrawing my PFs from B and C attract tax or should I still reposrt to transfers.
Is the 5 yrs clause for tax exemption only valid when the service is with the same employer?
Thanks
Hi Madhukar,
U shud transfer ur PF and do not withdraw it….the clause of 5 yrs means continuous employment, whether or not with 1 employer…the only thing is for 5 yrs the PF should not be withdrawan..
Thanks & Regards,
Gurpreet
Thanks Gurpreet,
Should I transfer it only for the long term benefit purpose? I reckon there would be no tax since the total service is unbroken for more than 5 years.
Regards,
Hi Gurpreet,
Thanks for all the information here. I really appreciate it.
I similar to Madhukar worked for company A for 3 years and company B for 3.5 years continuous employement all 7 years+. I want to withdraw the PF money through the company B which I have resigned recently. Would I have to pay any tax on the PF withdrawn?
Waiting for your valuable input.
Thanks
Majid.
I resigned My previous company In August 20011 after working 22 month there .Now for my requirement If I am going to withdraw my PF, is that PF withdrawal amount will be taxable? if taxable then how much??????????/
Hi Rajesh,
If that is the only co where u worked and u don’t hv any other PF, then the amout withdrawn will be taxable….the entire amount of PF u withdraw will be taxable
Thanks & Regards,
Gurpreet
Gurpreet,
Currently I having NEW PF account with new company and want to old company PF withdrawal .Please tell me how much tax will be deducted……
Hi Rajesh,
The amount of Tax that will be deducted will depend that how much income u were withdrawing with the earlier co i.e. in which Tax slab u were being taxed earlier. The same slab will be applied.
Thanks & Regards,
Gurpreet
CTC was 3 lacs /anum and PF is 50000.then how much tax will get deducted.
Rajesh,
I think it should be 10% (Rs. 5000/-), if there were no other investments made by u.
Thanks
Is any other way to save this tax while if i PF withdrawal PF amount.
Rajesh,
I’m not sure abt this, u’ll need to get in touch with the relevant PF deptt.
thanks
I joined an organization in May 2007 and resigned in Nov 2011 due to medical reasons. I am not working anywhere and after that I would only do business abroad.So, If I withdraw the PF after MAY 2012, would there be any sort of TAX deduction. plz confirm,
thnx
I have a question here.. 5yrs…what is the concept of this????
Is dat:
1) 5 yrs in 1 company
2) 5yrs continous deposits in 1 partcular PF a/c
3) Withdrawl after 5 yrs ( working or not)
4) Exemtion or how to avoid tax deduction?
Hi Rattan,
the answer is option 2. So, in ur earlier ques, since the deposit in PF was less than 5 yrs, so it will be taxable, if u withdraw it now.
Thanks & Regards,
Gurpreet
Hi Gurpreet,
Thanks for ur reply, I understand that tax deduction wud happen if i withdraw it right now.
But, If I do it after MAY 2012 , then still wud there be a deduction.??
Even there will be tax deduction
Hi,
If I have not worked for continous 5 yrs and If in case I join somewhere else, than can I withdraw PF while working. If yes,than would that be taxable??
please confirm
Hi Rattan,
There will be tax deduction, as there needs to be continuous deposit for 5 years,
Thanks & Regards,
Gurpreet
What is the difference between the PF that goes to a trust and PF deptt.
What are the ways to save deduction in experience in 1 company is less that 5 yrs and I do not wish to join any where due to medical resons.
Rattan,
There r no ways to save tax deduction in that case. U can just cover urself with investments as per Sec 80C, or 80CCF..
Thanks & Regards,
Gurpreet
I have a question reagrding myh case.
I joined a company in MAY 20007 & resigned in NOV 2011, now I am going abroad and I will not be joining any where bcoz of medical reasons.
If I withdraw PF after MAY 2012, still there would be a deduction , if yes, then how much.
Rattan,
I’ve answered this above..
Thanks & Regards,
Gurpreet
Hello Gurpreet,
I worked for Company ‘A’ from Feb 2007 till Aug 2008(19 months), Then i joined a company ‘B’ Aug 2008 till Sep 2011(3 yrs 1 month). Now i joined Company ‘C’ from Sep 2011….
I have transfered my PF amount from Comp A to Comp B, While leaving comp B i have opted for withdraw.
1. What is the rate of Intrest which i will get on the total Accumulation ?
2.How does the Intrest rate work ?
3. If incase i want to continue in accumulating to my 3rd company what should i do now ?
4. EX:if my total accumulation is 1,90,000/- how much will i get after Tax deduction ?
Thanks & Regards,
Manjunath
Hi Manjunath,
1. I think the Interest rate is 9.5%, that will be applicable.
2. Interest rate is fixed by Govt
3. For accumulating u should transfer ur PF and not withdraw it
4. The tax deduction depends upon ur salary which ur drawing from the co. The tax slab will be calculated accordingly.
Thanks & Regards,
Gurpreet
Dear Sir
Actually I am working on Employee Provident Fund Project..
Please tell me what are rules and regulation of Pension and withdrawal amount…
please reply me soon……..
Hi Nihar,
I’ve written the rules in the article itself….u can refer that
Thanks
Gurpreet
My last gross salary was Rs 11500
My total working in the company was 4 yrs 10 mths
As per PF statement my amount is Approx. Rs 105000 with interest
How much tax will be deducted on my PF amount?
Hi Kumar,
I think it should be around 6k…..
thanks
Gurpreet
How did you calculate this?
My actual last salary detais are for ref…
Earnings Rs. ……
Basic 6775
House Rent Allowance 788
Conveyance 187
Site Allowance 3750
Deduction Rs. …….
MT Insurance 40
Employee ESI Contribution 202
Employee PF Contribution 813
Total Earnings 11500
Total Deduction 1055
Net Pay : 10445
Hi Kumar,
By adding Rs 105000 to ur salary I taxed it @10%…
Hi
My EPF account is maintained by EPFO Chandigarh office
Region Name Region Code Office Code Office Name
CH – CHANDIGARH PB CHD CHANDIGARH
Please tell me that if it is Statutory PF or Recognized PF.
Also tell me if the company has it own trust, then is it Statutory PF or Recognized PF or other?
Thanks
Hi Vandita,
Statutory PF is for Government/University/Educational Institutes (affiliated to university) employees.
The Chandigarh one is recognised PF
Thanks
Hello,
Thank you for this informative blog..
Actually my question is
I have worked total 6.5 years. first 3 years the EPF was collected in company trust.
After that 3.5 years my EPF was collected at EPFO. and in the meantime I got my first company’s EPF transferred to my second company’s EPFO account.
Now I am going to pursue a full time education for 1 year.
Could you please let me know if my EPF amount will be subject to tax if i go for withdrawal? and how much wd be the tax in percent terms?
If I keep it in EPFO without withdrawal and transfer later after 1 year after i rejoin into service.. will the amount collected in my account earn me interest during this 1 year when I am off to study? Is keeping the EPF account dormant between employments allowed?
Thanks and Regards
Hi P,
ur PF will not be taxable if withdraw it, as u’e maintained it for more than 5 years….the dormant PF a/cs are not given intt if they r more than 3 years old…also, they will be closed…plz check the following link (http://articles.timesofindia.indiatimes.com/2011-03-03/india-business/28649979_1_inoperative-accounts-epfo-employees-provident-fund-organisation)
Hi Gurpreet,
Your response awaited.
ne line is added in my last post i.e This amount (105000) carry both EPF and EPS amount and EPF amount is maintained in company’s trust.
Hi,
The company I was working since 2007 got merged with another company and hence our PF were also transferred (after giving transfer request). I quit this company last year. Now, if I check EPF site for my PF from first company’s it says transferred. However, when I check PF number from the second company I joined it says invalid or data not updated. The second company has its own PF trust. Does the PF number hold good on the EPF website?
Appreciate feedback
Hi Prasad,
Yes ideally the PF # should hold good on EPF website, it should be updated….In this case u may need to contact ur Co or the concerned PF office..
Thanks
The EPF website was updated with the PF account details till 31-mar-2010, u can able to view only the PF account opened before Mar 2010.
Hi,
I worked as following
Company A from Jul 2006 to Jul 2010
Company B from Sep 2010 to June 2011
Company C from Sep 2011 to Till date
I filled the form to transfer PF from A to B & it recently got trasferred successfully. Now I if I withdraw PF from B then would there be any tax on it ? PF account of company A is more than 5 years old
Appreciate your response.
Atul
Hi Atul,
It will not be taxable….
Thanks
Many thanks Gurpeet for your response
I want to be very careful before filling withdraw form for company B.
Although I did not receive any official communication/receipt from PF office that amount is transferred from A to B. However if I check EPF site for claim status it gives following message.
“Claim Form 13 for Transfer to New Account Number: AGAINST Old Member Account No (xxxxxxxxxxxxxxx) has been approved. Payment is under process.”
For the same account if I check the balance then it gives message “Your account has been settled”
Shall I consider amount is transferred to B & fill the withdrawal form?
Appreciate your response.
Atul
Hi Atul,
Yeah it looks like that the amount has been transferred. u can check that with your HR and confirm that.
Regards,
Gurpreet
Thanks Gurpreet.
Hi Gurpreet,
A the end of Jan 2012 Iwould have compleneted 5 years of continuous service with 3 employers. In between I took breaks of 15 days and one week before joining each new employer. Will these be counted as ‘breaks’ ?.. … am planning to quit soon however I want to ensure my last day covers the 5 year period.
Employer 1 – 3.6 years (Jan 29 2007)
15 day break
Employer 2- 9 months
1 week Break
Employer 3 – 7 months – (till date)
– Can my last day be Jan end or so I need extra days of service Till mid Feb to ensure that the ‘net’ period is 5 years?
– Transferring Emp 1 to 3
– Employer no 2 PF has still not been transferred (as I cannot fill te form for the transfer as am expecting another transfer into that account)
– Does all the PF need to be transferred int one account to be considred ‘continuous service’? Employer will not transfer the same after I resign… Can PF be transferred/ consolidated after resignation?
Will be really helpful as I am confused about whether to resign now or wait a few more months.
Hi Maria,
the breaks b/w employements will not be counted. so u need to work some extra days to complete 5 years. however, leave taken during employement are considered a part of employment. Also, you’ll need to transfer all ur PF to one PF and then withdraw it. In that case it will not be taxable.
Thanks & Regards,
Gurpreet
Thanks, Gurpreet
Hello Gurpreet,
I worked for Company ‘A’ from Aug 2006 till Feb 2010(43 months), Then i joined a company ‘B’ Mar 2010 till Sep 2011(19 month).
I got transferred PF amount from comp A (Govt Pune PF Office) to Comp B PF a/c (Govt Mumbai PF Office). Now i joined Company ‘C’ from Sep 2011….
Please let me know, If I withdraw the amount from comp B, would it be taxable?
Hi Mayank,
It will not be taxable.
Thanks & Regards,
Gurpreet
Dear Gurpreet,
As you know very well that there are 2 parts of PF amount.
1. EPF amount
2. EPS amount
As per PF statement my EPF amount is approx. Rs 70,000/-(with interest) and EPS amount is approx. Rs 30,000/-
My EPF amount will be settled by Company’s PF trust.
My total tenure in the resigned company is 4 yrs and 10 months.
My salary was neverTaxable in the entired period of tenure in the company.
Last Gross was Rs 11,500/-
Now, I have 2 questions:
1. About Tax on my EPF/EPS amount.
2. Does any amount be added in my EPF/EPS amount from the Central Govt from its own coffers.
Hi Kumar,
Even I’m not 100% sure that what % is considered for tax deduction. However I believe that your last drawn salary should be considered. So adding up ur last drawn salary with that co and the PF amount, whatever the total amount is and in which Tax slab it falls, tax will be deducted.
I’m not able to understand ur 2nd ques, can u pls re-phrase it.
Thanks & Regards,
Gurpreet
Hi Gurpreet,
I worked in a company in Mumbai for 4 yrs. Then I got transferred abroad in the same company, but as an expat earning salary in USD. Therefore my ‘full and final’ settlement was done with my company’s Indian entity, and all EPF contribution was stopped as I am now deemed to be an NRI.
Please advise if my EPF withdrawal in this case will be taxable or not? If taxable, will the tax be on: (employer contribution+interest+my contribution exempted under 80C)?
Hi Aaftaab,
In ur case the PF withdrawal will be taxable. The entire portion (employer contribution + employee contribution + interest) will be taxable.
Thanks & Regards,
Gurpreet
Dear Gurpreet,
My queastion was..
Will any amount be added towards my EPS amount from the side of Govt of India.
One more question is..
My last drawn salary and PF maount(with Inerest) is Approx. 82000/-
Will any tax be deducted on the same.
Hi Kumar,
Honestly speaking I’m not too sure about EPS component….I haven’t been through that aspect …
Apologies.
Thanks & Regards,
Gurpreet
Dear Gurpreet Ji,
I am not still clear that how much tax will be deducted on my PF amount!
I am again mentioning my details:
My total EPF amount is : Rs 75,000 (with interest) (maintained in company PF trust)
My total Pension amount (EPS) is : Rs 30,000 (approx)
My last drwan slaray was : Rs 11500 (gross) / Rs 10445 (in hand)
Total working : 4 yrs 10 mths
Hi Kumar,
Adding Rs.105000 to ur last annual salary i.e (11500*12 = 1380000 + 105000 = 243000). ur total income becomes Rs243000, So I taxed it at 10% (243000 – 180000 = 53000 *10%= 5300) After adding cess it will be around 5500….However, even I’m not sure that this is the correct way…you’ll hv to wait until u receive the stmt from PF office of ur withdrawal..that will clarify things
Thanks & Regards,
Gurpreet
Dear Gurpreet Ji,
My job period in compnany for 12years and i have withdraw pf (Empoyee Share )
can i withdraw employer share which is in Pension Fund i do not want pension so how can i withdraw?
Thanks & regards
Uma shankar sharma
Hi Uma Shankar,
I don’ t think that you can withdraw only Employer share…the entire amount i.e. employee+employer share will be withdrawn…u can contact ur HR deptt for the relevant formalities of withdrawal..
Thanks & Regards,
Gurpreet
I worked in the company for 2.5 yrs which had a separate PF trust. Then moved to another company which maintains the EPF. Is there any time frame within which my PF from Previous company has to be withdrawn or transferred?
Hi Bhargavi,
Yes, u should transfer/withdraw ur PF within 3 years, after that u won’t b getting any intt also those a/cs will b freezed by Govt also.
Thanks & Regards,
Gurpreet
hi gurpreet,
i have worked in a bank ,from june 2010 to october 2010..the bank deducted my pf every month,but now they are saying that as you have not completed 6 months and u were not confirmed so u will not be able to claim pf and moreover they maintain their pvt. pf a/c..
is there any way 2 claim pf….they are not ready to give me the claim..plzz help
my second question is …now i m working in company from march 2011…and i m about to leave that job in jan 2012…will i ll b able to claim my pf bcoz one of my friend told me that if u leave the job bfore 1 yr employer will not b liable to contribute,,,,is that true….
Hi Tannu,
As regards ur first instance with Bank, I think that you won’t be able to claim ur PF….since the employer has the authority to say that you were not confirmed..Although this is not written in law, but this is a practice which most of the companies follow..
Secondly, u can withdraw ur PF, and employer is liable to contribute….and u should be able to get employer portion also, when u withdraw ur PF
Thanks & Regards,
Gurpreet
I have completed 5 yrs in current organization and working now aslo, is it possible to withdraw my PF after 5 yrs by continuing with same employee
Hi Krishna,
You need to ask / confirm that from ur HR..
Thanks & Regards,
Gurpreet
Hi,
I have submitted form 13 to my current employer for PF transfer. My previous employer says they have submitted the check for my EPF , but for EPS they dont have any control on them. I have checked with RPFC and as per the they have not yet received any document for EPS transfer. Please confirm if I can go ahead submit form 10C to withdraw my EPS , even though EPF will get transferred to my new a/c. Please also confirm that for will the EPS is taxable for less that 5 yrs or employment.
Hi Pooja,
In one of my earlier comments/reply I mentioned that I’m not well versed with EPS rules, hence I won’t be able to suggest anything regarding that.,,,my apologies for that…
Thanks & Regards,
Gurpreet
Dear Gurpreet,
I was looking for an answer related to PF & I think I got answer to my questions. However, would like to get it clarify from you before proceeding with PF withdrawal. Here is my question:
1. Worked in Company ‘A’ from 2003-2006 (31 months)
2. Worked in Company ‘B’ from 2006-2007 (13 months)
3. Worked in Company ‘C’ from 2007-2011 (50 months)
During this period, I was at onsite for about 27 months. I always transferred my PF accounts during the shift. Now I have left Company ‘C’ & planning to withdraw the PF. Kindly let me know whether my PF withdrawal will be taxable! I have not completed 5 years of continuous service in any company, however always transferred the PF account to new PF account created by the new employer. Appreciate your quick response on this.
Thanks,
Guru
Hi Guru,
The rule says that for 5 yrs there shouldn’t be any withdrawal, u may have multiple PF’s but since u’ve kept on transferring it….it won’t be taxable.
Thanks & Regards,
Gurpreet
Thanks a lot Gurpreet..
Regards,
Guru
Hi Gurupreet,
My working period is as follows.
Comapny A: 11th July 2005 to 24th November 2006.
Comapany B: 1st December 2006 to 20th December 2008
Company C: 28th december 2008 to till date
Gaps between two companies= 6+8= 14 days.
As per my understanding my total service period from 11th July 2005 to till date is 6 years 5 months 14 days. But for PF purpose will those 14 days(break ) will be deducted ?
Plz reply me then I will proceed with withdraw or transfer my PF accounts accordingly.
Thanks
Manas
[email protected]
Hi Manas,
The break period will be excluded, but in ur case u’ve well over 5yrs of continuous transfer…so it will not be taxable…u can go ahead with the withdrawal facilities..
Thanks & Regards,
Gurpreet
Hi Gurupreet ,
Again will I lose the EPS amount or I will be get those after 10 years service or after 58 years age.
Hi Manas,
I’m sorry, but I’m not sure about EPS part…
Thanks & Regards,
Gurpreet
@Gurpreet,
A per EPS Scheme Details,
The member can take either withdrawal benefit or can take scheme certificate so that the 10 years service can be added to any future service that you may put in, in any other covered establishment. By virtue of being a holder of a scheme certificate, if the member dies before 58 years, widow / widower and children shall be entitled for pension.
Hence you can wither take withdrawl or receive pension after 58 years.
I am working for a company which has recognised PF trust. Total job tenure is 3years-11 months as on date. Overall my contribution + VPF + EMployer contribution is approx 3.6 lacs. I am now resigning and will do my own business. I do not need PF money as of now.
When should I withdraw it so that It is not taxable. Kindly advise.
– If i withdraw today- It is taxable for sure.
– What If i withdraw after completion of 5 years, i.e somewhere after Feb’2013.
Pls clarify.
regards
Hi Neeraj,
It won’t matter if u withdraw after Feb’13. There has to be continuous transfer for 5 years….in ur case the withdrawal will be taxable.
Thanks & Regards,
Gurpreet
Hi Gurpreet,
Seems you have well knowledge of PF withdrawls. And hats off for giving same answer of five year continuation of services to everyone for tax deduction.
Well i also want to use your expertise regarding the same.
I worked in company A for 3years 6 months. As per policy my PF will be deducted for tax. However, If the service is terminated on account of ill-health, will my pf still be deducted for tax?
And please let me know the documentation needed to provide employer A or PF office.Or any extra formality i need to fulfill
Rule 8 of Part A of the Fourth Schedule of I T Act provides the circumstances under which the accumulated balance payable to an employee is exempt from tax. If employee fulfills any of following conditions, payment from recognised provident fund is tax free :
(i) if he has rendered continuous service with his employer for a period of five years or more, or (ii) if, though he has not rendered such continuous service, the service has been terminated by reason of the employees ill-health, or by the contraction or discontinuance of the employers business or other cause beyond the control of the employee, or
(iii) if, on the cessation of his employment, the employee obtains employment with any other employer, to the extent the accumulated balance due and becoming payable to him is transferred to his individual account in any recognised PF maintained by such other employer
Dear sir,
I worked in A company for 6.5 yrs. this company initially has company pf trust pf for 2 yrs, later moved accounts company pf trust to govt pf trust.
A company (2yrs private trust)
A company (4.5 yrs govt trust)
I worked in only one company for 6.5 yrs. recently i shifted to some B company.
And since my contribution to govt trust is for only 4.5 yrs,
Am I taxable if withdrawl pf .
please advise.
regards
kumar v
Hi,
I worked in a company in Bangalore from Apr 05 to Sep 06 and then shifted abroad. I want to withdraw my PF now:
1. Is the form 19 on the EPFO website the correct form to do the withdrawl?
2. Is there a postal address where I can send the completed form?
3. From my reading of Form 19 it looks like I do not need last employer’s attestation (since I have not worked in India for around 5 years now) – is that correct?
Thanks in advance for your help
Pls clarify whether my PF will be taxable.
1. Worked in Company ‘A’ from 2003-2004 (15 months)
2. Worked in Company ‘B’ from 2004-2007 (36 months)
3. Worked in Company ‘C’ from 2007-till date (52 months)
I have transfered my PF from “A” to “B” and “B” to “C”.
If I leave my current organisation will the tax be deducted from PF.
Hi Chetan,
It will not be taxable..
Thanks & Regards,
Gurpreet
Quoting from my article Withdrawal or Transfer of Employee Provident Fund
Q: Are there in any tax implications, if I withdraw the EPF balance at the time of a Job change?
In case you are a member of recognized provident fund it depends on if contribution is over 5 years or not, including transfers from different companies. For ex: an employee who has worked with X company for say 3 years, then he resigned from that organisation and joined Y company, wherein he worked for 2 years, then resigned from there to join establishment for 2 years but during these 7 years of service he has not withdrawn but transferred his Employee provident fund, then we say continuous service of 7 years.
If you withdraw before completing a period of 5 years, then all your previous years income gets recomputed as if the fund was unrecognized from the very beginning (i.e., the tax benefits you received on your own contribution u/s 80C/88 in earlier years will get forfeited) and further the employer contribution and interest received will be added to your current income subject to relief under section 89. In other words Payment received by the individual in respect of the employer’s contribution along with the interest accrual thereon is taxed as “salaryâ€. Interest on the employee’s contribution is taxable as “other incomeâ€. Payment received in respect of the employee’s own contribution is exempt from tax (to the extent not claimed as a deduction earlier).
I-T provisions provide that the trustees of a recognised PF or any person authorised by the regulations of the fund to make the payment of the accumulated balance to the employee should deduct tax at source(TDS) while paying the amount. Further, the person liable to deduct tax has to issue the certificate of tax deducted at source (Form 16) within the specified time frame to the employee depicting the details of taxes withheld from the accumulated PF balance and also comply with other salary-related compliance necessities
Sir, I was employed with a company as an employee from May 2009 to Feb 2012 which is less than 5 years. I resigned and now I am working as a contractor in another company where I donto get PF. I want to withdraw PF from my first company now, without tax being deducted by the government.how long should I wait before withdrawing my PF from first employer to avoid tax OR can I transfer PF to PPF to avoid tax. please repsond. thanks
Crossley,
PF withdrawal is tax free only when you have continued the service for at least five years.The best option is to transfer your PF balance to the new company.However you cannot do this. You can withdraw the PF balance. The government will not deduct any tax. You will have to add the corpus in your income and then will have to pay the tax according to your tax slab.
Hi,
I have checked my PF acct balance online recently.. is that balance inclusive of Interest amount accumilated till now?
Thanks in advance,
Nag.
Yes, it’s the balance owed to you including interest.
Hi Nagesh,
To share from my Experiance., its not correct figers. with the message you will also be knowing when was the last update done on your PF account, it would be as of that day without interest…..
Thanks
Anand
Hi,
I have in my first company for 3 yrs and 8 months. (1st Aug 05 – 31st Mar 09). Then left the company for some personal reason and sat idle for next 6 months. Joined the 2nd company in Oct 09 – till date (2 yrs. 8 months).
Here I have 2 queries:
A. Is there any tax deduction if I want to withdraw my PF of my 1st company? If so, what is the percentage of deduction?
B. If I will transfer the 1st PF to my current company PF, what will be the deduction charges? If so what is the %? If I will leave my current company in next 1 year down the line and withdraw the whole PF, then what will be the deduction charges?
Thanks
Tutu Raj
Tutu,
The PF withdrawl will be added to your income and taxed at your income tax slab rate.So if you fall under 20% tax slab currently then it is taxed at the same rate.
If you transfer this PF to existing company then there will be no tax.
At any time you pay tax on PF withdrawl according to your income.
Hi Gurpreet,
Thanks for taking time and answering all the user questions diligently, greatly appreciated. I too have a query. I worked in x company from April 2007, our dept was acquired by another company Y in May 2010. Y company has its own PF trust (recognized) and I quit this Y company in November 2010. I had applied for PF withdrawal and I got amount only in December 2011. From the computation sheet, i can see that the PF amount from may 2010 – november 2010 has been taxed at source. I have started my own venture since in May 2011 and have not had salary till date as we are still working on our product .
I would like to know if I need to pay income tax on the PF amount that got transferred?
Hi Prasad,
Once u file ur Income tax return, you’ll show the gross amount of PF withdrawal as income along with ur other income. U’ll then calculate tax on that income and adjust the TDS deducted on PF withdrawal, the net tax would be payable/refundable.
Thanks & Regards,
Gurpreet
Hi,
I have been working for a company since July 2007. Now i am planning to quit from this comp before completing 5 years. Kindly let me know will my PF be taxable ? if yes whts the %
Hi Manjy,
The PF withdrawal will be taxable. The % will depend upon ur current drawn salary…
Thanks & Regards,
Gurpreet
Hi Manju,
The PF withdrawal will be taxable. The % will depend upon ur current drawn salary…
Thanks & Regards,
Gurpreet
Thanks for the reply Gurpreet….
Please let me know , after quiting the job before completing 5 years , can i have my PF account opened till it becomes 5 years and then withdraw? (with out transfering to another account)…. what % of current drawn salary will be deducted ?
Hi Manju,
Even after quitting the job b4 completing 5 yrs, the PF withdrawal will still be taxable, as the PF a/c should hv a continuous deposit until 5 yrs…..The entire amount withdrawn will b taxable.
Thanks & Regards,
Gurpreet
Thanks Gurpreet 🙂
Hi, I left my company on feb 10th where as my joining date was march 12th, so about a month short of 5 years in service. Now that I have withdrawn the PF, the balance showed 208000 before but i received only 178000, about 30000 rupees short. So does it mean tax has been duduced at about 15% on the total? Please point me in the right direction. Thanks in advance…
Hi Biju,
Yes it does look like the TDS has been deducted, it will be confirmed once u receive the statement from ur office or PF deptt. The % / Tax slabs depends upon ur last drawn salary.
Thanks & Regards,
Gurpreet
Yup…you are right…I lost 30888 for just one month short of 5 years… 🙁
Please let me know if the PF is taxable.
I worked in Company A from 1 May 2000 to 24th May 2004; Company B from 7th June 2004 to 31st August 2007; Company C from 17th Sept 2007 till date.
I have not been able to transfer the PF from Company A to B to C; as in most cases the company was in a start up stage, and in case of Co B, my forms were considered misplaced after a year of submission of the forms.
As on March 2012, I am now getting PF with drawn from Company A and B . Will this be taxable?
Geetha
Hi Geetha,
If you withdraw your PF before service of 5 years, it is taxable.In your case if you would have been able to transfer, you would have saved this taxation.But now since your PF is withdrawn before the required service years limit, it is very well taxable.
Hi Geetha,
Yes the PF withdrawal will be subject to TDS.
Thanks & Regards,
Gurpreet
Hi Mr. Gurpreet,
I joined a renowned public limited company on 27th Jan 2000 and worked in one of their factory situated in Madhya Pradesh for almost 2 years and during that period i was member of Govt. PF Scheme. On 20th Jan 2002, my services was transferred to the head office of the same company situated in Mumbai. Since, i joined there at a senior position, i became member of their own PF Scheme (which is a recognised PF scheme). After working in head office for more than 3 years , sometimes during may 2005, i left that company and joined a company in Dubai, UAE. I didn’t withdraw the balance lying in PF account until July 2011 as the company has a provision that in case i wish to join them back i can continue to be part of the PF fund. The balance continue accumulate interest on it till time i decided to withdraw it finally. While settling the payment the fund deducted TDS at the maximum rate of 30% and asked me to claim the same in my income tax return.
My queries are as under:
1. what would be the taxability of such withdrawal given the circumstances that I worked with the same company for more than 5 years but i was member of the PF scheme for less than 5 years.
The fact that PF was withdrawn 6 year after leaving the company and the fund continued the interest untill the amount was withdrawn. Can i say that i was member of the Fund for more than 5 years
2. If i have to file IT return, under which head i have to include such income. “salaries” or “other sources” if under salaries then will i be eligible for any standard deduction etc.
I would greatly appreciate your advise in this regard
Regards
Nitin Nahar
Dear Gurupreet,
I was working with Company A from 17April 2007 to 29Feb 2008. There the PF was mainatined at Mumbai PF account.
Then I joined Company B and worked from 17March 2008 to 29Feb 2012. Here the PF was mainatined by thire own trust.
I had trnasfreed my PF from company A to company B. Now, i have joined company C, however have requested for my PF withdrawl.
Would this PF be taxable in light of the above?
Fruther, approx. 4% of the Employer contribution was trasnfereed in Employees Pension Scheme. Would this amount be receviable now and if yes what about the income tax on the same?
Or when the EPS amount would be availiaebl?
Please reply and thanks in advance.
Hi,
Can I transfer PF from 1st and 2nd organization to 3rd organization directly? Or can say 1st Organization to 3rd Organization without 2nd Organization interfere?
Thanks,
Anil Pawar,
7702408111 .
Hi,
I want to know that if I transfer PF from my Company “A ” to “B”,and then I withdraw the whole amount from B,will there be any tax deduction.
(I have already left both the companies and now working in “company C”.)
The total period exceeds 5 years and thus I think income tax deduction is not applicable.Please guide.Below is my service duration w.r.t each company.
Company A : From 26-05-2006 to 31-03-2010.
Company B : From 01-04-2010 to 30-01-2012.
Regards
Jitendra
Dear Mr. Gurpreet,
I work for a reputed public ltd. company. Recently, I have resigned from the services of this firm, in order to start my own venture. On my last working day with the firm, I would be completing about 4.5 years of service.
Now, if I withdraw my PF, say after 5 years, will the PF benefits that would accrue will be taxable or will they be exempt.
Eagerly looking for a quick reply. Thanks.
Hi,
I worked in a company X from 2007 to 2010 and this company X was bought out by company Y. All my PFs prior to 2007, has already been transferred to the company X’s PF a/c, however, X’s PF a/c has not yet been transfereed to company Y’s PF a/c. I submitted the form for transferring my PF in company X to Company Y, and I am being told the the form got rejected and i have to submit a new form. Since I am in need of money and am facing difficutly in getting it transferred, is it a wise idea to withdraw my PF in company X, without transferring it to Y? Please let me know.
Regards,
Ganesh
If the employees has neither change the job nor he is getting retired. If he withdraw Rs.200000/- from his PF a/c whether it is taxable?
PF withdrawl except in case of change of job or retirement is taxable?
Dear Gurupreet,
I went through the forum and found an appropriate one,even after so many posts I have still queries for below scenario :
1. I want to withdraw the pf from previous company’s PF Trust where I worked for 4.5 years.Will the TDS be deducted in this case and will it be on the basis of last drawn payslip for previous company.
2. Had I worked for more than 5 years in a company and then withdrawn the pf , even then is it required to show it as income while filing IT return. Will the tax be deducted on it.
3. If answer to question2 is yes, then at which point of time in life is the PF withdrawal is tax free
Hi, If I want to withdraw my PF funds after completion of 5 years. But have a gap of 1 month in my service as I did no job for 1 month due to some personal reasons. Then will PF amount be taxed?
Hi
I have worked in ‘X’ company from Aug 2010 to Aug 2011 and then left the company . Now I want to withdraw my PF. Will it be the taxable income from PF . If Yes then how could i save my tax .
I do not want to transfer the PF to my next company .
And tax slab will be accordingly to that year tax slab or the current year tax slab .
thanx
Vinay,
yes it will be taxable since it will be added to your income.The tax rate will apply fo r this financial year.
There is no special provision to save tax on PF.Hence, adding to your income the general tax saving rules will apply.
I had completed 6 years. Now want to withdraw PF. Do I need to show it in any IT return ?
Rahul,
No you do not need to as PF after six years of services is not taxable.
Hi
I have started a ULIP ( SARAL JEEVAN PLAN) with Birla sun life in year MAY 2008 with half yearly mode of premium 9711 Rs ( 19422 per annum) . I have filled all the Premium with out any delay till yet . Now i have paid 8 premium ( 9711*8 =77688) and todays my total amount with my policy in around Rs 55000.
Please suggest me should I continue with the same or withdraw the Policy.
Thanks
VINAY
Hi Gurpreet/Jitendra,
I worked in a company (Adobe systems) from April 2006 to Jan 2012 (more than 5 years) and now I want to withdraw the PF from my previous company.
But the company has privately managed PF and when I asked for withdrawal, they said it can only be withdrawn, if I am not in service for last 2 months when I apply for withdrawal and asking me to give an affidavit for the same. Where ever I ask, people tell me that its non taxable to withdraw PF after 5 years of service but can a company has different rules for me 2 withdraw the PF ?
I am in this big confusion as I really want to withdraw my PF and invest it in better place than 8-9% interest. Any pointers, help is welcome.
regards
Vedant
Hi, If I want to withdraw my PF funds after completion of 5 years. But have a gap of 1 month in my service as I did no job for 1 month due to some personal reasons. Then will PF amount be taxed?
If yes than what if I withdraw PF after 5 years of continuous service after the gap in service will my PF be still taxable?
Hello,
I am abt to withdraw the PF amount after 2.6yrs of service, and my salary doesn’t come under income tax bracket,Then also does the income tax will be deducted from the withdrawal?
Hi Mr. Gurpreet,
I joined a renowned public limited company on 27th Jan 2000 and worked in one of their factory situated in Madhya Pradesh for almost 2 years and during that period i was member of Govt. PF Scheme. On 20th Jan 2002, my services was transferred to the head office of the same company situated in Mumbai. Since, i joined there at a senior position, i became member of their own PF Scheme (which is a recognised PF scheme). After working in head office for more than 3 years , sometimes during may 2005, i left that company and joined a company in Dubai, UAE. I didn’t withdraw the balance lying in PF account until July 2011 as the company has a provision that in case i wish to join them back i can continue to be part of the PF fund. The balance continue accumulate interest on it till time i decided to withdraw it finally. While settling the payment the fund deducted TDS at the maximum rate of 30% and asked me to claim the same in my income tax return.
My queries are as under:
1. what would be the taxability of such withdrawal given the circumstances that I worked with the same company for more than 5 years but i was member of the PF scheme for less than 5 years.
The fact that PF was withdrawn 6 year after leaving the company and the fund continued the interest untill the amount was withdrawn. Can i say that i was member of the Fund for more than 5 years
2. If i have to file IT return, under which head i have to include such income. “salaries†or “other sources†if under salaries then will i be eligible for any standard deduction etc.
I would greatly appreciate your advise in this regard
Regards
Nitin Nahar
I have closed the PF account after around 23 years of service(20 years in 1st and about 3 years in next) an amount of around 30lakhs. what account should I show the amount in income tax returns , will it be under income exempt from taxes? or is it not required to be mentioned in returns?
while I see the income being credited in bank account, I haven’t received the statement from PF department
Hello,
I had opted for PF withdrawl before 5 years and the amount was Rs. 69895/- and after sometime i received Rs 48262/-. (Tax deducted is 21633/- ) I am guess around 30% tax deduction occured,but my salary comes under 20% slab.
At the time of filling Tax returns this was missed, If i refile tax, is there any refund options
Hi Sir, I worked in company A from July 2007 to Dec 2011. After that I tried to transfer my PF of Company A to my new company. But transfer did not happen for last 1 and 1/2 year.
If I withdraw my PF of Company A now in June 2012, will the money be taxable.
Thanks
Pranav
Hi,
Your blog is really very informative, appreciate that:)
I have submitted the application for transfer of my last two companies PF account into my current company PF account around 8 months back.
I have 2 questions:
1) How much time this transfer is supposed to take as per the Govt rule?
2) How will I know once the transfer is done? I read somewhere that Form 23 (Annual PF Statement) from the RPFC is the only way, is it true?, if yes then please let me know when do Indian citizen get form 23 (which month of the year), also How do I ensure that I get Form 23 this year?
Niraj Kumar
hello sir..
It would be a favour if you can help me.
I have joined a co. on 14th july 2007 and i am going to resign on 7th of july,2012.I have almost served the co. for 5 years ,just a week short, but cannot continue in any condition as i am going for further studies.will my balance in recognised PF would be taxable.if yes,any ways to avoid it.
waiting for your reply.
thank you.
Khushbu,
for provident funds withdrawl to be nontaxable the period of service has to go over 5 years. Since you will be short by a week your PF withdrawl will become taxable. If you are joining elsewhere, you can transfer it instead of withdrawing the money.
ok sir..thanks for the reply..but i have one more question.
if before completing 5 years of my service, i leave the job n take a break of 2 years for higher studies and transfer my balance accumulated with the present employer to the new employer that i will join after 2 years from now i.e I will not withdraw the PF amount and keep the balance with the present employer and transfer it after 2 years.will that help me in avoiding tax implications.
Khushbu,
If you take a 2 years break and then transfer, there will be no tax implication
sir, Provident fund is taxable in which year..at the time of resignation from the job or at the time of withdrawl from the PF A/c if i decide to withdraw rather than transferring it somewhere.
Khushbu,
PF is taxable in the year you withdraw it.
Hi,
I have almost completed 4.11 months and 10 days into company.
The CompanyA where I have joined is acquired by CompanyB after 2.5 years.
CompanyA have submitted request to transfer the PF from Company A to Company B and still that is process. I got confirmation that amount is getting transferred and will be reflected in next PF slips (2011- 2012) which is not yet released.
Question 1: If I am planning to resign and move out immediately in couple of days will get tax exception (4.11 months completed and 10 days above or possibly 2 – 3 days more to complete the release process) ?
Question 2: Do I need to submit two PF withdrawal forms or single only ?
Please let me know as soon as possible.
Thanks in advance.
Working stint with my previous employer was from May’07 – Apr’11 (4 years). Post which I was on a sabbatical for a year, and recently joined a new organization. In the interim period, I had not claimed the PF amount for withdrawal. Since, as of today, my PF account is 5 year old can I withdraw the amount without attracting taxes on the same?
My query:
I was employed with an MNC from Oct ’06 to Mar ’07 and later on I joined an MNC Bank from Mar ’07 till April’ 10. Subsequently I joined another financial services company from April ’10 till April ’12. Currently I have not taken up any assignment. I have neither withdrawn nor transferred my PF balance from any of the above mentioned companies.
I would like to know the tax status if I withdraw the PF from each of the above companies. Or if I intend to transfer the above mentioned three PF account balances to another prospective employer’s PF fund/trust what is the tax status/relief.
Please clarify.
Thanks & Regards
Upendra
I had my EPF account with previous employer. Now I have switched my job wherein the employer has its own PF trust (i.e. no PF accnt with EPFO). When I checked with my new employer about transfer of my PF amount from previous employer I am told tht it is not possible as they have different PF entities(i.e. EPFO and own PF trust). I am told that I willhave to withdraw my PF amount. Is this correct or is there any way wherein I can transfer my PF to new employer)?
I found this post quite interesting and knowledge-provider.
I have two queries:
1. What is the time frame within which PF Withdrawal claim has to be settled by EPF Deptt. I have had more than 15 years continuous service and – I have resigned now and have filed PF withdrawal claim with the PF authorities.
2. Am I also entitled to Pension and if so what will be the monthly pension amount or if I opt for commutation what will be the said amount. Also please advise Is it compulory to file claim for Pension as well?
Sir,
I am an employee of a company, recently our co. issued Form 16. On that it is written that the Company calculated perquisite on the difference between the rate declared by PF Trust (9.5) and Government of India (8.25) so the gross salary is reduced and TDS deductible on it is also reduced but actually more TDS is deducted so take a note of it while filing Return of Income.
What does it mean?
please Reply as soon as Possible.
Hi,
I was working in a company for 5 years 11 months and 16 days. But my company started to deduct PF after 1 year only (as I was a trainee). So my PF deduction was for 4 years 11 months and 16 days only.
My questions is If I withdraw my PF, will it be taxable.
Thank you,
Regards,
Boopathy
Hi,
I am working in the same company from 7 years. Now I am need of some money and is it possible to take it from PF? If yes.. what is the exact procedure?
-Thanks
Rajesh
Hi,
I have worked in capgemini pune for 30 months and i resigned the job and joined cognizant in chennai.
my questions:
1. how long will it take for tranfer of amount to chennai pf account
2.whether shall i transfer or withdraw the PF
3. If i withdraw how much % interest they will take
plz answer my quires………….
Thank u
Hi
I worked in Company ‘A’ from 4 April 2005 to 15 Mar 2010 where company PF trust existed. I switched over to company ‘B’ on 16 Mar 2010 and worked till date July 2012 where Regional PF exist. I got my PF account of company ‘A’ transferred to present RPF in Oct 2010. Plz let me know if I leave the Company’B’ and do not want to join elsewhere now onwards then whether my withdrawn PF account from present RPF will be taxable or not.
Thanx
Arvind
Hi sir /madam
I want some clarification regarding employees contribution for provident fund to know as if the provisions are properly created or not
Hi,
I have worked in Wipro for 36 months and i resigned the job and joined next day to YASH Bangalore.As per above discussions , my PF withdrawal is taxable
My questions:
1.For next Financial year, DTC will be implemented,Still is PF withdrawal (before 5 years) taxable under DTC?
2.Wipro maintains Wipro PF trust,Will they add interest amount to my PF?
If yes for how long they will add interest amount.
Thanks in advance.
Regards
Mayur.
hi,
i have joined company in dec 2002 and left in feb 2012, in between i was transfered to nepal for three years where i have maintain a seprate pf account , i have retuned back in 2008 and continue my same pf accout, pls. advice if i want to withdraw my pf now will any tax imposed.
i have a query relating to the withdrawal of PF .
i have worked for less than 5 years and the contribution made by me is 12000 and now i have withdrawn 30000 ( the total amt in account ) .
what is the taxability and how to bifurcate the same under different head
I have joined Co. A on 21st August 2007, will be leaving Co. A on 31st July 2012, thus fall short of 20 days of continuous service of 5 yrs. Pls note that PF has been deposited for last 60 months. Now, i will be joinin Co. B on 1st August 2012 & i don’t want to transfer the PF amount to Co B. In such case if i withdraw the PF amount, will it be taxable?
I have completed 5 years with the same company and now i wish to withdraw my PF at the time of resignation, will this be taxable or not?
1. I worked in Company A from 28th June 2004 to 30th Dec 2006
2. I worked in Comany B from 3rd Jan 2007 to 5 Jan 2011. I got the PF transferred from Company A, during my tenure of working with company B.
3. I am working with Company C since 6Jan 2011, and getting my PF here. Have not got the PF transferred yet.
If I want to withdraw PF from Company B (accumulated + transferred from A). Will it be taxable?
I worked in company A for 1.5 years
I worked in company B for 3 years (PF transferred to company B)
Left company B for higher education purpose
PF account was getting interest for few months , so technically account is opened for >6 years now
If I move my PF amount to PPF, will I have to pay any taxes? I am not withdrawing just transferring everything.
Hi
I need one query about the PF deduction before 5 years. Please let me know if i will withdrawn my PF before 5 years how much many % will deduct. My company has been deducted 30% falt of total amount. Please advice. Regards, Atul Bajpai
I have joined Co. A on 12Feb 2007, will be leaving Co. A on 3rd Feb 2012, thus fall short of 8 days of continuous service of 5 yrs. Now, i joinined in Co. B on 6th of Feb 2012 I have not transfered the PF amount to Co B. In such case withdrawl of the PF amount is taxable in my hand?
Did an article on Tax on EPF withdrawal covering different kinds of Provident Funds (Recognised, Unrecognised), Overview of EPF or Recognised Provident Fund, when is withdrawal exempt from tax, Tax on withdrawal before 5 years, TDS on withdrawal amount, Relief under Section 89.
Hi,,
My query is regarding PF withdraw. I worked for my Ex-company for more 6.5yrs and after completing 60 days , I applied for PF withdraw.
My Ex-company had a EPF trust.
My accumulated PF amount was more than 2LAC but I recieved it 1.5 LAC only and remaining amount was deducted as TDS plus CESS.
Please confirm if after 6.5yrs , TDS should be applicable for me.
An early response will be highly appreciated and if I can get that amount by any means , please do let me know.
-Thanks,
Rahul
I have resigned from my current job my date of joining is 07/08/2006 and my last date in the current company is 15/11/2013. I Want to with draw the amount.i was with the company for 7 years 03 months and 20 days .
if i am withdrawing the PF whether it is taxable or not?
If taxable how much taxable ?
Hi Vijayakumar,
Do you know the email id of the person/team who I can contact in capgemini for PF details.
Any information is very helpful.
Regards
Hi, currently, I am working with company C. I was working with company A which I left to join company B and then company C. I have not transferred PF amount from company A to company B. Can I transfer it directly to company C along with PF amount in company B?
Hi Shiv,
Can you share your expert view on one point (real life case). Suppose an employee has already spent 10 years in a company. Earlier, the company did not have recognized PF (it was unrecognized PF, in the form of a trust) and it was optional, so he did not subscribe. Subsequently, the company acquired the recognized PF status. Therefore, this employee, after having spent 10 years in the company, now opts for PF. Thereafter the company starts deducting PF every month. After completing 12th year, the employee leaves the company and decides to encash his PF balance. Which of the following will be applicable:
1) No tax on PF withdrawal since he has spent 5 years in company and it is a recognized PF
2) PF will be taxed on withdrawal since he has subscribed to PF only for the last 2 years (and not 5 years).
Your view will be highly appreciated.
Regards,
SB
Hi
I am working in a MNC for last 5 years. I want to know if I want to leave the job and start my own business. In that case , I would like to withdraw the PF amount for my business purpose. Is that PF withdrawal taxable?
Sir, If I left my service after completion of 4 Year of service and I withdraw my PF after 1.5 Year of left service (total Period from joining the service to Withdrawal of PF is 5.5Years)in this case the PF will be Taxable or Tax Free. Please clarify me. Thanks
Hi,
i Worked for a company since july 19 2010 to Jan 19 2015 (4.6 years), till now i have not withdrawn my PF , should i need to wait till July19 2015 to withdraw the amount as it will be 5 years , will it be taxed if i take now ?
i have job in company 2011 how to withdraw amount ya transfer my new pf A/c ?
I have nearly 20 years of continuous service and I have withdrawn Rs 15 lakhs from PF for purchase of flat. Do I have to pay taxes for? The second question is whether I will get tax exemption for my present contribution to PF as a withdrawal has happened in this FY? An early reply will be helpful in my tax planning. Thanks in advance…
Mr. Bhushan Kumar my relative withdraw their PF Amount Rs. 76069.00. on Dec.2015. Is their full am0unt will be taxable or not. If full amount not then on what amount the Tax will be applicable