Hi,
I am trying to determine if the PF amount is taxable or not if I want to withdraw the whole amount after 1.5 years of working. For example, the monthly deduction is Rs. 780, and I have been working for 22 months.
So, 780*22=17160*2=34320+Interest (Just approximate). From the above equation, will I be able to get the whole Rs. 34000+ (If I resign after 22 months) or will it come after tax deduction?
Please help me clear my doubt.
From India, Delhi
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I am trying to determine if the PF amount is taxable or not if I want to withdraw the whole amount after 1.5 years of working. For example, the monthly deduction is Rs. 780, and I have been working for 22 months.
So, 780*22=17160*2=34320+Interest (Just approximate). From the above equation, will I be able to get the whole Rs. 34000+ (If I resign after 22 months) or will it come after tax deduction?
Please help me clear my doubt.
From India, Delhi
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PF contributions accumulated and withdrawn after any period of time is not taxable Regards Sebastian
From India, Bangalore
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1From India, Bangalore
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PF withdrawal is taxable if withdrawn before five years as per income tax act. Please get this clarified from A CHARTERED ACCOUNTANT. Paresh Shah.
From India, Mumbai
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From India, Mumbai
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P.F. withdrawal is tax exempted. You will get whole of your contribution andd only a part of employer’s contribution if the account is closed in less tthan 5 years. K.Viswanathan.
From India, Delhi
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From India, Delhi
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Hi, Can the employer stop any employees' EPF or denies to share any information if he/she is absconding?
From India, Delhi
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From India, Delhi
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Thank you, Shakti.
I worked as an employee in a consultancy for about 6.6 months (Sept 20, 2010 - April 4, 2011). I did submit my resignation, but they are claiming it as an absconding case, and hence they are not sharing my EPF Account number with me. What can I do to obtain my EPF Account number?
From India, Delhi
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I worked as an employee in a consultancy for about 6.6 months (Sept 20, 2010 - April 4, 2011). I did submit my resignation, but they are claiming it as an absconding case, and hence they are not sharing my EPF Account number with me. What can I do to obtain my EPF Account number?
From India, Delhi
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As per My poll results 90% says that PF is not taxable at any circumstances. What about the rest 10%?
From India, Delhi
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From India, Delhi
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Shewta, Had you got pay slip from your employer and Pf deduction shown in your pay slip???
From India
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From India
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Yes Shakti,i do have a pay slip and my PF Deduction is mentioned in my appointment letter also.
From India, Delhi
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From India, Delhi
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Shewta,
If your employer completely denies providing the PF number, you can visit your nearest PF Office and meet the PF Inspector in your area. Bring along your Appointment Letter and Payslip, and explain the situation to him. He will definitely assist you with this matter. Before taking this step, revisit your employer and inquire again about the PF. If the employer refuses, inform them that you will escalate the issue to the PF office.
I am certain that following these steps will prompt your employer to take a defensive stance.
From India
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If your employer completely denies providing the PF number, you can visit your nearest PF Office and meet the PF Inspector in your area. Bring along your Appointment Letter and Payslip, and explain the situation to him. He will definitely assist you with this matter. Before taking this step, revisit your employer and inquire again about the PF. If the employer refuses, inform them that you will escalate the issue to the PF office.
I am certain that following these steps will prompt your employer to take a defensive stance.
From India
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Thank you so much, Shakti,
I have applied as instructed, and they have provided me with my Account Number. Upon checking my balance, I noticed that the Employee Contribution shows as Amt. 2286 and the Employer contribution as Rs. 701, which, in my opinion, seems to be less. My monthly deduction was Rs. 450, and I worked there for 6.6 months. So, logically, the employee's contribution itself should amount to Rs. 2700 (450 * 6) + Employer Contribution + Interest. I would appreciate your assistance with this matter.
From India, Delhi
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I have applied as instructed, and they have provided me with my Account Number. Upon checking my balance, I noticed that the Employee Contribution shows as Amt. 2286 and the Employer contribution as Rs. 701, which, in my opinion, seems to be less. My monthly deduction was Rs. 450, and I worked there for 6.6 months. So, logically, the employee's contribution itself should amount to Rs. 2700 (450 * 6) + Employer Contribution + Interest. I would appreciate your assistance with this matter.
From India, Delhi
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As mentioned earlier in the thread, PF withdrawals are not taxable ONLY if withdrawn after 5 years. My submission is that legal opinions with related conditions cannot be decided based on poll results of YES and NO.
From India, Mumbai
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From India, Mumbai
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First of all, it is taxable, and 90% of people are less informed.
Now, why is it taxable? When withdrawing from the exempted establishment, a percentage of it is deducted as TDS as per the Income Tax Act, and it is legal.
If your EPF is more than one lakh and you are withdrawing it, then you have to show it in your tax return, and it will be considered as savings. So, if EPF is greater than the saving limit as per the IT law, then it is taxable upon withdrawal.
Please correct me if I am wrong.
Stay cool, Atom
From India, Phagwara
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Now, why is it taxable? When withdrawing from the exempted establishment, a percentage of it is deducted as TDS as per the Income Tax Act, and it is legal.
If your EPF is more than one lakh and you are withdrawing it, then you have to show it in your tax return, and it will be considered as savings. So, if EPF is greater than the saving limit as per the IT law, then it is taxable upon withdrawal.
Please correct me if I am wrong.
Stay cool, Atom
From India, Phagwara
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Dear Atomz,
As per present law, P.F. deduction as well as payment with accrued interest is tax-exempt. The government was planning to make P.F. E.E.T. (exempt, exempt, and tax) under the proposed direct tax code, but this has been dropped due to stiff resistance from trade unions and other interested parties. Up to 20% of contribution towards E.P.F. is tax-exempt. Similarly, up to Rs 100,000/contribution towards P.P.F. is tax-exempt. Repayment and accrued interest are also tax-exempt on these amounts. P.F. is also protected from attachments. Even employers/Government cannot adjust any dues from employees in his/her P.F.
K. Viswanathan
From India, Delhi
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As per present law, P.F. deduction as well as payment with accrued interest is tax-exempt. The government was planning to make P.F. E.E.T. (exempt, exempt, and tax) under the proposed direct tax code, but this has been dropped due to stiff resistance from trade unions and other interested parties. Up to 20% of contribution towards E.P.F. is tax-exempt. Similarly, up to Rs 100,000/contribution towards P.P.F. is tax-exempt. Repayment and accrued interest are also tax-exempt on these amounts. P.F. is also protected from attachments. Even employers/Government cannot adjust any dues from employees in his/her P.F.
K. Viswanathan
From India, Delhi
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Dear Prince Manash,
The withdrawal of PF amount is taxable if the withdrawal happens before the expiry of five years except when the service is terminated:
1. as a result of ill health of the employee.
2. as a result of closure of business by the employer.
3. as a result of reasons beyond the control of the employee.
When an employee leaves one job and joins another and transfers the amount of PF from the old account to the new one, the withdrawal is exempted from income tax, and the period with the old organization is counted for the five-year deadline.
Fit yourself to the situation where you fall and consider the implications of income tax in your case.
With regards,
From India, Haora
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The withdrawal of PF amount is taxable if the withdrawal happens before the expiry of five years except when the service is terminated:
1. as a result of ill health of the employee.
2. as a result of closure of business by the employer.
3. as a result of reasons beyond the control of the employee.
When an employee leaves one job and joins another and transfers the amount of PF from the old account to the new one, the withdrawal is exempted from income tax, and the period with the old organization is counted for the five-year deadline.
Fit yourself to the situation where you fall and consider the implications of income tax in your case.
With regards,
From India, Haora
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PF withdrawn on account of resignation/retirement is fully exempted from income tax. However, during service, one can withdraw a partial amount of their PF in certain cases such as self-marriage, medical expenses, house construction, etc. In these cases, it will be non-refundable PF. Though in other cases, it can be withdrawn, but the amount withdrawn will be subject to refund.
From India, Karnal
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From India, Karnal
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OK
those who say EPF is not taxable.
Please read the following:
Rule 9 (1) of part A of Schedule IV provides that when an employee does not satisfy any of the conditions laid down in Rule 8, the accumulated balance paid from the recognised provident fund shall be included in his total income and the tax payable on such accumulated balance shall be the differential tax calculated for each of the years concerned as if the fund had not been a recognised provident fund.
For calculation of tax, therefore, the accumulated balance which is being paid has to be split up into:
i) Employee’s own contribution year by year;
ii) Accumulated Company’s contribution;
iii) Total interest credited on employee’s contribution;
iv) Total interest credited on the Company’s contribution.
Since, the fund is to be treated as an unrecognised fund, contributions made by the employee from year to year would not be eligible for rebate under Section 88. The company’s contributions and interest credited on employees’ and company's contributions each year are however to be ignored as the employee does not receive them year to year. So, in r/o the earlier years the tax on employees salary has to reworked each year without giving rebate under section 88 on his own contribution. The amount by which the total tax so calculated for earlier years exceeds the total tax previously deducted and paid for such years shall be the additional tax payable in respect of accumulated employee’s own contributions.
In the year the accumulated balance is due, the accumulated company’s contribution and interest thereon that is being paid are to be included in the total income of the employee of that year under salary income in view of Section 17(3) (ii) which defines the expression “profits in lieu of salary” to include the share of Company’s contribution and interest thereon not exempt under Section 10(12) of the Income Tax Act. Employee’s own contribution and interest thereon are specifically excluded from the expression “profit in lieu of salary” in Section 17 (3)(ii). From this, it follows that the interest on employee’s contribution cannot be considered as salary. The interest on employee’s contribution is however, undoubtedly an income as defined under Section 2(24) and Supreme Court in the case CIT v/s G.Hyatt (80 ITR 177) has held that such interest is taxable as “income from other sources”.
PLEASE CORRECT IF BEYOND LEGAL.
Stay Cool,
Atom
From India, Phagwara
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those who say EPF is not taxable.
Please read the following:
Rule 9 (1) of part A of Schedule IV provides that when an employee does not satisfy any of the conditions laid down in Rule 8, the accumulated balance paid from the recognised provident fund shall be included in his total income and the tax payable on such accumulated balance shall be the differential tax calculated for each of the years concerned as if the fund had not been a recognised provident fund.
For calculation of tax, therefore, the accumulated balance which is being paid has to be split up into:
i) Employee’s own contribution year by year;
ii) Accumulated Company’s contribution;
iii) Total interest credited on employee’s contribution;
iv) Total interest credited on the Company’s contribution.
Since, the fund is to be treated as an unrecognised fund, contributions made by the employee from year to year would not be eligible for rebate under Section 88. The company’s contributions and interest credited on employees’ and company's contributions each year are however to be ignored as the employee does not receive them year to year. So, in r/o the earlier years the tax on employees salary has to reworked each year without giving rebate under section 88 on his own contribution. The amount by which the total tax so calculated for earlier years exceeds the total tax previously deducted and paid for such years shall be the additional tax payable in respect of accumulated employee’s own contributions.
In the year the accumulated balance is due, the accumulated company’s contribution and interest thereon that is being paid are to be included in the total income of the employee of that year under salary income in view of Section 17(3) (ii) which defines the expression “profits in lieu of salary” to include the share of Company’s contribution and interest thereon not exempt under Section 10(12) of the Income Tax Act. Employee’s own contribution and interest thereon are specifically excluded from the expression “profit in lieu of salary” in Section 17 (3)(ii). From this, it follows that the interest on employee’s contribution cannot be considered as salary. The interest on employee’s contribution is however, undoubtedly an income as defined under Section 2(24) and Supreme Court in the case CIT v/s G.Hyatt (80 ITR 177) has held that such interest is taxable as “income from other sources”.
PLEASE CORRECT IF BEYOND LEGAL.
Stay Cool,
Atom
From India, Phagwara
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