Hi,
I have a small query related to the tax aspect of the Provident Fund. I have been working at MphasiS since February 2006. I resigned on the 18th of July and was released on the 25th of July 2012. I spent around 6.5 years in the organization, so I would like to withdraw my PF now.
Since I joined as an employee of MphasiS in Mumbai, my PF account was opened with the EPF office in Bandra, Mumbai in February 2006. However, due to a change in company policy, the PF account was shifted from Mumbai to Bangalore, Karnataka in February 2011 (after 5 years).
So my question is, since I got a new Bangalore-Karnataka PF account only a year back in February 2011, even though I have been working at MphasiS for the past 6.5 years as mentioned above, would the amount be taxable if I withdraw it now?
Thanks in advance.
Syed
From India, Pune
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I have a small query related to the tax aspect of the Provident Fund. I have been working at MphasiS since February 2006. I resigned on the 18th of July and was released on the 25th of July 2012. I spent around 6.5 years in the organization, so I would like to withdraw my PF now.
Since I joined as an employee of MphasiS in Mumbai, my PF account was opened with the EPF office in Bandra, Mumbai in February 2006. However, due to a change in company policy, the PF account was shifted from Mumbai to Bangalore, Karnataka in February 2011 (after 5 years).
So my question is, since I got a new Bangalore-Karnataka PF account only a year back in February 2011, even though I have been working at MphasiS for the past 6.5 years as mentioned above, would the amount be taxable if I withdraw it now?
Thanks in advance.
Syed
From India, Pune
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As far as I know there is no difference in taxation Of pf whether it is from one account or multipli accounts.
From India, Mumbai
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2495From India, Mumbai
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I am a new member and will try to help you to the best of my knowledge. An employee who has worked for less than 5 years will have taxable PF withdrawals, while for more than 5 years, it will not be taxable. PF is considered as a part of the employee's income. Hope this information was helpful.
Ms. Naseeb Rajput
HR Manager
CBS Publishers & Distributors Pvt. Ltd.
From India, Dehra Dun
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Ms. Naseeb Rajput
HR Manager
CBS Publishers & Distributors Pvt. Ltd.
From India, Dehra Dun
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Hi Mr. Saswat,
Thanks for the reply. Just to clarify, the withdrawal is not from multiple accounts. My PF amount got transferred from one account to another just last year due to a change in organizational policies. So my question is, would the PF amount be taxed if I withdraw now?
Many Thanks,
Syed
From India, Pune
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Thanks for the reply. Just to clarify, the withdrawal is not from multiple accounts. My PF amount got transferred from one account to another just last year due to a change in organizational policies. So my question is, would the PF amount be taxed if I withdraw now?
Many Thanks,
Syed
From India, Pune
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Dear Mr. Naseeb,
Thank you for the response. I would like to draw your attention to the information I have provided in the query above. I have been with my current organization for 6.5 years. However, due to a change in organizational policies, my PF amount was transferred from Mumbai to Karnataka last year in February, with a new PF account number. My question is, if I withdraw the amount now, will it be taxable?
Many Thanks,
Syed
From India, Pune
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Thank you for the response. I would like to draw your attention to the information I have provided in the query above. I have been with my current organization for 6.5 years. However, due to a change in organizational policies, my PF amount was transferred from Mumbai to Karnataka last year in February, with a new PF account number. My question is, if I withdraw the amount now, will it be taxable?
Many Thanks,
Syed
From India, Pune
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Dear Mr. Abbas,
Thanks for the reply. As mentioned above, I would like to withdraw the amount now. My question is, since the account changed from Mumbai to Karnataka with a new PF number only last year, although I have spent 6.5 years in the organization, would the amount be taxed now if I withdraw it?
Many Thanks,
Syed
From India, Pune
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Thanks for the reply. As mentioned above, I would like to withdraw the amount now. My question is, since the account changed from Mumbai to Karnataka with a new PF number only last year, although I have spent 6.5 years in the organization, would the amount be taxed now if I withdraw it?
Many Thanks,
Syed
From India, Pune
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hi kindly contact to expert CA Mr Ravi Garg 09990303710.u can give my reference as well said shefali mam gave ur number.he will solve ur all problem. with regards shefali
From India, Delhi
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From India, Delhi
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Syed,
PF is a "tax-free" investment vehicle which follows the Exempt-Exempt-Exempt regime, which means:
1. Your contributions are tax-exempt.
2. Your interest earnings are tax-exempt.
3. Your withdrawals are tax-exempt.
I don't think it matters how long you have had an account (if my understanding is incorrect, please let me know). However, I read in the newspaper last year that EPFO will now start deducting TDS (I'm not sure if it's being implemented). If that's the case, then you would have to claim a refund on your income tax return.
Thanks,
Ravi
From India, Delhi
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PF is a "tax-free" investment vehicle which follows the Exempt-Exempt-Exempt regime, which means:
1. Your contributions are tax-exempt.
2. Your interest earnings are tax-exempt.
3. Your withdrawals are tax-exempt.
I don't think it matters how long you have had an account (if my understanding is incorrect, please let me know). However, I read in the newspaper last year that EPFO will now start deducting TDS (I'm not sure if it's being implemented). If that's the case, then you would have to claim a refund on your income tax return.
Thanks,
Ravi
From India, Delhi
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You have to clarify what you mean by withdrawal. Do you mean that you are going for the final settlement of your account, which is possible only if you resign or retire, etc.? Or are you going to withdraw part of your accumulation for some authorized purposes such as building/buying a house or medical treatment, etc.?
Again, you should also clarify whether your EPF account is maintained by EPFO or by the company itself as an exempted Provident Fund. Your liability or otherwise to pay tax depends on all these answers.
From India, Madras
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Again, you should also clarify whether your EPF account is maintained by EPFO or by the company itself as an exempted Provident Fund. Your liability or otherwise to pay tax depends on all these answers.
From India, Madras
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Dear Sir,
I have resigned from my organization after a service of 6.5 years. My company used to maintain my PF in EPFO. I would like to withdraw the full amount as a final settlement.
I know that my withdrawal amount will not be taxable since I have completed more than 5 years in the above-mentioned organization. My query was, after 5 years of service, my company changed my PF account from Mumbai - Bandra to Bangalore-Karnataka. As a result of this, I got a new Karnataka PF number only last year in Feb 2011. So would my withdrawal be taxed?
Many Thanks,
Syed
From India, Pune
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I have resigned from my organization after a service of 6.5 years. My company used to maintain my PF in EPFO. I would like to withdraw the full amount as a final settlement.
I know that my withdrawal amount will not be taxable since I have completed more than 5 years in the above-mentioned organization. My query was, after 5 years of service, my company changed my PF account from Mumbai - Bandra to Bangalore-Karnataka. As a result of this, I got a new Karnataka PF number only last year in Feb 2011. So would my withdrawal be taxed?
Many Thanks,
Syed
From India, Pune
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PF amount withdrawal is taxable if it has been withdrawn within 5 years. However, in your case, the amount is transferred from one account to another account and is withdrawn only after five years, hence it's not taxable.
From India, Madras
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From India, Madras
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Checked with someone else; apparently, the taxation rule is as follows (disclaimer - this is from someone else, checked also on Google, but not from personal knowledge):
For withdrawal of the amount in less than 5 years from opening the account:
1. On own contribution to PF, no income tax.
2. Interest on own contribution to PF: taxable as income from other sources.
3. Employers' contribution: taxable as salary.
Logically, then, interest on employers' contribution should also be taxable as income from other sources.
From India, Mumbai
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For withdrawal of the amount in less than 5 years from opening the account:
1. On own contribution to PF, no income tax.
2. Interest on own contribution to PF: taxable as income from other sources.
3. Employers' contribution: taxable as salary.
Logically, then, interest on employers' contribution should also be taxable as income from other sources.
From India, Mumbai
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PF Calculation Sheet To The Subscribers At the Time Of Provident Fund Withdrawal.pdf
Gratuity - Taxation Issues.docx