I am investing Rs 2000/month towards VPF starting from April 2016. Can you help me understand the taxation of VPF. I read that the Maturity proceeds from VPF are tax exempted only if the employee has serviced the company for a continuous period of 5+ years. I have been with my present company for 12 years now but have started VPF this year only. So if i change my company next year will the maturity amount be taxed??
At the time of investing in VPF you will get the tax benefits under Sec.80C. However, at withdrawal, if you not completed 5 years, then it will be taxed.
Changing company will not make you to pay tax on it. However, if you withdraw from EPF within 5 years, then it will be taxed. You can retain it till retirement.
So if i do not withdraw VPF before 5 years but have changed multiple companies within the duration of 5 years i would not have to pay taxes correct.