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
Acknowledge(0)
Amend(0)
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
Acknowledge(0)Amend(0)
As mentioned earlier in the thread, PF withdrawals are not taxable ONLY if withdrawn after 5 years.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
Acknowledge(0)Amend(0)
2From India, Mumbai
Acknowledge(0)Amend(0)
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
Acknowledge(0)Amend(0)
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
Acknowledge(0)Amend(0)
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
Acknowledge(0)Amend(0)
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
Acknowledge(0)Amend(0)
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
Acknowledge(0)Amend(0)
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
Acknowledge(0)Amend(0)
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
Acknowledge(0)Amend(0)
From India, Karnal
Acknowledge(0)Amend(0)
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
Acknowledge(0)Amend(0)
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
Acknowledge(0)Amend(0)Looking for something specific? - Join & Be Part Of Our Community and get connected with the right people who can help. Our AI-powered platform provides real-time fact-checking, peer-reviewed insights, and a vast historical knowledge base to support your search.