My employer included his contribution towards PF (12%) in the taxable income. But as per my knowledge, the employer's contribution (12%) towards PF is totally exempt from taxable income.
Please answer immediately.
Thanks,
Sunil Patel
From India, Jalalpur
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Please answer immediately.
Thanks,
Sunil Patel
From India, Jalalpur
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Hi Sunil,
The total accumulated PF contribution is not taxable. However, income tax will be deducted at source (TDS) if the member leaves the services before completion of five years and the withdrawal PF amount is more than Rs. 30,000. TDS will be deducted at a rate of 10% provided PAN is submitted. In case Form No. 15G or 15H is submitted by the member, then no TDS will be deducted. TDS will be deducted at the maximum marginal rate (34.608%) if a member fails to submit PAN and no Form 15G or 15H.
TDS will not be deducted if:
- PF is transferred to another PF account.
- PF payment is less than Rs. 30,000 and service period is also less than 5 years.
- The member withdraws PF after 5 years of continuous service, including service with the former employer.
- The termination of service is due to the ill health of the member, discontinuation, or contraction of business by the Employer.
From India, Madras
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1015The total accumulated PF contribution is not taxable. However, income tax will be deducted at source (TDS) if the member leaves the services before completion of five years and the withdrawal PF amount is more than Rs. 30,000. TDS will be deducted at a rate of 10% provided PAN is submitted. In case Form No. 15G or 15H is submitted by the member, then no TDS will be deducted. TDS will be deducted at the maximum marginal rate (34.608%) if a member fails to submit PAN and no Form 15G or 15H.
TDS will not be deducted if:
- PF is transferred to another PF account.
- PF payment is less than Rs. 30,000 and service period is also less than 5 years.
- The member withdraws PF after 5 years of continuous service, including service with the former employer.
- The termination of service is due to the ill health of the member, discontinuation, or contraction of business by the Employer.
From India, Madras
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TDS on PF withdrawal has been revised from Rs. 30,000 to Rs. 50,000, and the circular with a copy of the GO is attached.
N. Nataraajhan, Sakthi Management Services
(Hp: +91 94835 17402; E-mail: natraj@sakthimanagement.com)
From India, Bangalore
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N. Nataraajhan, Sakthi Management Services
(Hp: +91 94835 17402; E-mail: natraj@sakthimanagement.com)
From India, Bangalore
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PF Contribution on Leave Encashment - Clarification by EPFO.pdf