PF Update: How much tax will have to be paid on withdrawing money from the PF account..

Now if we talk about the Employee Provident Fund, then the salaried employee has to deposit PF money from his salary, and your money gets invested in it along with the employee's contribution. You can withdraw money from it after maturity, but you have the option you can withdraw money from your PF account even earlier, but you should also know whether you have to pay tax on withdrawing money from EPF or not. .

Withdrawal of money before 5 years

If you withdraw money before the completion of five years of contribution in the PF account, then you have to pay TDS on it. For this, you must be in service continuously for 5 years. In this, your tenure with both new and old employers is counted together. If you transfer your EPF balance from the old employer to the new employer after completion of five years or more, then TDS is not deducted from your funds.

The job has been temporary for the last five years

If you have been working on a contract somewhere within five years, your PF will not be deposited. In contract jobs, the employer does not have to contribute to PF. But suppose that after some time you become permanent in the job and your PF starts getting deducted. You leave this job after completing 5 years. And now if you want to transfer your EPF balance somewhere else, then it will be taxed because, out of the five years you have completed, you have spent some part of it in a temporary position.

Your fund is not recognized

Any provident fund which has not received approval from the Commissioner of Income Tax is considered ineligible for tax exemption. It may be approved by the Provident Fund or some other institution, but to get an exemption on withdrawal after 5 years, approval is required from the Income Tax Commissioner. If you are a member of URPF, your withdrawal is taxable whether you have completed five years or not.

Some important things-

If you withdraw less than Rs 50,000 before completing 5 continuous years of service

TDS will not be deducted, but if the person falls in the taxable bracket then he will have to show the EPF withdrawal in his return of income.

If you withdraw more than Rs 50,000 before completing 5 continuous years of service

10% TDS will be deducted on giving PAN. That too will not be deducted if Form 15G/15H is submitted.

If you withdraw from EPF after completing five years

TDS will not be deducted. He will not have to show this withdrawal even in the return of income.

  If you want to transfer PF money from one account to another after changing jobs,

  TDS will not be deducted. It will not have to be shown in the return of income, because it is not taxable.

  If you have to leave the job for some reason before completing five years of service/the reason for withdrawing money is beyond your control.

TDS will not be deducted. It will not have to be shown in the return of income, because it is not taxable.