TDS on PF as an NRI

Dear Sir,

Here are my replies to your query:

1. Yes, it will be taxed as you have not completed the exemption requirement of 5 year of continuous service.

There are 4 parts of PF-

Employee contribution - Non Taxable *

Employers contribution- Taxable

Interest on employers contribution- Taxable 

Interest on employees contribution- Taxable

* This will also be taxed if you have claimed deduction under sec 80c for pf contribution in earlier years.

It will be taxed as per the normal slab rate applicable to you. 

If your below the age of 60 then: 

Upto - 2,50,000 - NO TAX

Above 2,50,000 to 5,00,000- 5%

Above 5,00,000 to 10,00,000- 20%

Above 10,00,000-30%

2. Yes, whenever you will withdraw the amount in India. It will be taxed as per the Income Tax Act.

Let me know if there is some other query.

Thanks and Regards

Divya Chugh 

Yes you will still be taxed and it will be taxed @10%. But you can claim a refund of same if you file an income tax return and your income is below the exemption limit.

You can even try to submit Form 15G online and ask them not to deduct TDS but generally they deduct TDS even after submitting such form and you have to claim refund of it.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you

Dear Sir,

Hope you are doing well !!

"According to income tax laws, withdrawal from EPF before the completion of five continuous years of service is taxable. The five years of service can be completed either with one employer or more than one. On the other hand, if you withdraw the money after the completion of five years of service, this amount will be exempt from tax."

-It is to be noted that there are four parts to any EPF contribution— employee’s contribution, employer  contribution and interest earned from both employer’s contribution and employee’s contribution.

- In case the period of continuous service is less than five years, the sum total of the employer’s contribution to EPF and interest earned on it is taxable under the head “salary" in the subscriber’s income tax return.

-The subscriber’s own contribution portion of the withdrawal is not taxable. But if the subscriber had claimed deduction under Section 80C on his contribution in earlier years, it becomes taxable under salary. It is to be noted that the EPFO subscriber’s own contribution towards EPF is eligible for deduction under Section 80C of the Income Tax Act.

-The interest earned on the subscriber’s own contribution portion is taxed under ‘income from other sources’.

- On withdrawal before five years of continuous service, TDS or tax deducted at source @10% is levied

Hello,

Yes, it would be taxable since the requirement of 5 years of continuous service is not completed.

TDS would be deducted at 10%.

You can file your income tax return and claim refund of TDS deducted as per slab benefits.

I hope that this answer satisfies your requirements.

Regards,

CA Hunny Badlani

Hi,

Yes, PF will be taxable in India even if you have moved outside India as you have not completed 5 years of continuous service.

1. Yes. Rate would be 30% plus surcharge plus cess.

2. Yes 

3. You can claim relief u/s 89(1).

Hi,

Since, you have not completed 5 years of continue service condition so it will be taxed .