PF withdrawal

Hi,

Hope you are doing well !

It is important to note that withdrawal of the PF account by a salaried employee is not recommended(Technically not allowed). Many employees withdraw their EPF account at the time of leaving the organisation. Legally right thing is to transfer the PF account from old employer to new employer.

Keep in mind that the amount you withdraw will be taxable, if you withdraw it before completing 5 years.

TDS on EPF will be deducted if withdrawal is more than Rs 50,000. This is applicable from June 2016.Earlier this limit was Rs 30,000.

TDS will be deducted at 10 % provided PAN is submitted. Otherwise, TDS is deducted at the rate of 34.608 % if PAN is not submitted.

Thanks & Regards,

Payal Chhajed

Yes if withdraw less than 5 yrs then entire withdrawal included in your last year income & normal slab applicable

Int on contribution taxable under other income head while contribution part under salary head

Please find below the tax treatment:

Total Employee Contribution: The employee’s contribution would be taxable to the extent of deduction claimed under Section 80C, if any, under the Income-tax Act,1961

Total Employer Contribution: - Income from Salary”as profits in lieu of salary

Interest on Employee Contribution: Income from Other Sources”

Interest on Employer Contribution: Income from Salary”as profits in lieu of salary

Thanks & Regards,

Payal Chhajed

Dear Sir,

- Employer's contribution and Interest on employers contribution should be shown under the head salary as profits in lieu of salary.

- Employees contribution and Interest on employees contribution will be taxable under the head income from other sources.

- Yes you need to show full amount and not interest on contribution as the TDS has been deducted on 100% withdrawal.

Thanks

Hi,

The entire withdrawal will become taxable.

regards,

Nikhil

Dear Sir,

Yes you are liable to pay tax @30% slab.There is no special rate for PF withdrawal. Apart from normal tax, you need to pay the difference of aggregate tax which would have been payable if certain tax concessions allowed to the employee participating in RPF had not been allowed to the employees participating in the fund and aggregate tax actually paid by him for these years. In other words, relief allowed to the assessee shall be withdrawn.

Further he can claim relief u/s 89 for employers contribution and interest on employers contribution for all those years in which employer made contribution.

Thanks

Hi

The PF withdrawal shall be taxable at the slab rate you are falling into i.e. 30%.

The employer's contribution and interest thereon shall be taxable as salary income.

The employee's contribution shall be taxable to the extent deduction was claimed in earlier years. Interest on employee's contribution shall be taxable under the head income from other sources.

Hi,

As per Income Tax Act, if PF contribution is withdrawn within 5 years of service the amount so withdrawn shall be taxable in the hands of assessee.

The amount withdrawn shall be subject to tax. Interest earned on PF is exempt from tax, i.e. 19 Lakhs shall be taxable in your hands at normal slab rates.

Hope your queries are resolved

Dear Sir,

The entire PF withdrawal will be taxable @ 30% as per your slab.

a) The employer’s contribution and interest, thereon, would be fully taxable as profits in lieu of salary or ‘salary income’ in the hands of the individual.

b) The employee’s contribution would be taxable to the extent of deduction claimed under Section 80C (as income from other sources), if any, under the Income-tax Act,1961 and

c) The interest earned on employee’s total contributions would be taxable as ‘income from other sources’ in the hands of the employee.

Warm Regards,

Karishma Chhajer

Hi,

Yes, the entire PF will be taxable as per your slab rate.

1. You will have to show employer contribution part in income from salary.

2. Your contribution and interest on PF will be taxable under other sources.

Yes, PF withdrawal before 5years will be taxed as per you normal slab rate.

Yes pf withdrawal will be taxed at normal slab rate.

Employer contribution will be taxed under salary head and employee contribution will be taxed as other sources income.