Tax on PF withdrawal

Tax on PF withdrawal

For personal reasons I had left my job in 2015 at the age of 56 after serving more than 10 years but had left my PF with the organisation, which I want to withdraw now.I understand interest accumulated post ceasing to be an employee is taxable.In this connection I would like to know if tax exemption can be availed under the following :
a) Post cessation would I be entitled for Tax exemption on accrued interest as per sub rule 3 of rule 5 of 4th Schedule Part A. If yes what are the requirements for availing exemption against this clause.
b) Transfer from EPF to NPS is now allowed, but through there is a PFRDA circular for transfer, EPFO has not come out with any circular as yet on transfer. However since I am entitled to full withdrawal now, can I transfer the accrued interest to NPS based on PFRDA guidelines and claim for Tax exemption.Can the Trust deny this transfer because of non availability of circular from EPFO

Asked 7 years ago in Income Tax

Dear Sir,

1) Sub Rule 3 of Rule 5 says for retention of PF amount after the cessation and not for tax exemption.

2) Not Sure.

Thanks

Vivek Kumar Arora

CA, Delhi

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Talk to Vivek Kumar Arora

Interest on PF balance till retirement is exempt u/s 10(12) of IT Act. Post retirement, the interest is taxable under income from other source. But if you invest in NPS you get tax benefit u/s 80C and 80CCD(1B) amounting to Rs.200000.