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?
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 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?
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, 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 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
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,,
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
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.
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?
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 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.
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 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?
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 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
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.
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 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 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 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