In today’s post we see the taxation issue related to EPF. Lot of employees simply either neglect it or will not try to understand it. But better to understand it and make use of tax benefits available.
Latest News-EPF Universal Account Number (UAN)-What it is?
First let us understand the types of EPF.
1) Recognized EPF-This scheme applies to an organisation or factory where employee count is 20 or more. This scheme mainly aims at promoting and securing the well being of the employees by way of provident fund (EPF), family pension (EPS) and insurance to them (EDLI). Once any organisation or factory enters into this scheme, it must continue irrespective of number of employees falls below 20 members. Employees drawing salary upto Rs.6,500 have to be member of this scheme. Employees who are earning more than Rs.6,500 have option either to join or not.
2) Unrecognized EPF-This is the scheme started by employer and employee which is not recognized by The Commissioner of Income Tax. Employee count below 20 members are usually comes under this scheme.
3) Statutory EPF-This scheme is mainly meant for government and semi government organizations, local authorities, universities, recognized educational institutions, railways, airlines etc.
Below table show the taxability of each type of EPF schemes mentioned above.
Notes:–
1) Salary for this purpose means basic salary and dearness allowance and commission as a percentage of turnover.
2) Amount received is fully exempt in case of an employee who is in continues service for a period of 5 years or more. Full exemption is also available for employees who not completed 5 years because of his ill health, discontinuance of employer’s business or any other reason which is not in control of employee. If account is transferred to new employer then the previous service from whom the account is transferred is also considered as a service period. If none of the above conditions satisfy then the amount will be taxed as unrecognized EPF. Also concessions availed under Sec 80C will be withdrawn.
3) Employee’s own contribution is not taxable but the interest thereon is taxable under “Income from Other Sources”. Both employer’s contribution and interest thereon is taxed as “Income from Salary”.
Hope this made simple understanding about EPF taxation.
235 Responses
Dear Sir,
I have retired from service at the age 59 from a company. But my service period is less than 5 years. Please advise whether my PF withdrawal amount is taxable. Retirement was not in my control
Thanks
Dear Francis,
Yes, it is taxable.
I had worked for a company for more than 5 years but during these five years I got an opportunity that was offered by the company itself to go outside India for a project having a tenure of one year. As I went outside India I was not liable to the any law/provisions in India and therefore no PF was deducted and paid to the PF authorities during that year. Now, I had withdrawn my PF so wanted to know that as I was out of India and my PF was not deducted in that particular year will my withdrawal be taxable or will it be exempt as I have served the company for a period of five years
Dear Kanishka,
As per me, they consider your EPF as less than 5 years of age.
sir , i was in service in a school as teacher. I got retired from my job on 31/08/2014 and accordingly my pf was also deposited till that date. But till now i did not withdraw my epf balance that still in my epf a/c. recently i observed my pass book with my UAN no, then i find that the interest on my pf balance was given upto 31/08/2017 on 31/03/2018 for year 2017-18.
it appears that they gave me interest upto 3 years only from my retirment, but as i now from 2016 , interest on inoperative a/cs has been allowed without any limit of years.
please clearify the legal position on it , if there is any mistake the remedy of it also.
i will b highy oblidged for your advice
Dear Atul,
Refer my post “Tax on EPF after resign, retire or terminated“.
Dear Sir,
I am having query about the ITR filing. As of Now my resident status is NRI and I have withdraw my PF in FY 2017-2018 and TDS deducted on PF amount.
Now I am filing ITR so can we claim for refund of TDS if income is less than 2.5 Lac?
Dear Pawan,
YES.
Dear Sir,
Thanks for your response.
Kindly help on below points
1. Is it mandatory to file ITR for NRI if income less than 2.5 Lac in India or No Income from any other source?
2. Can we take the refund in NRO account?
3. Is it mandatory to give the NRE account details during the ITR filing?
Thanks
Dear Pawan,
For all your doubts the answer is YES.
Dear Sir,
I recently with drawn RPF amounting to 59563 after 10% TDS, can I get this whole TDS amount refund ? and under which head I need to declare this income. I don’t know the portion of interest, employee and employer contribution. and my income for this year is less then 2.5 lakh
Dear Mahaveer,
If including this income your total taxable income is less than the basic exemption limit, then you can claim the TDS. This income is considered as income from other sources.
Is pension of Rs.1996 per month received from EPFO comes under head’income from other sources’ or under head ‘salary’ or this pension is exempt from income tax as per rules?
Dear Pawan,
It comes under the head of SALARY.
Dear Mr Tonagatti,
Need your advice.
I contributed towards EPF for LESS THAN FIVE YEARS, resigned from my job, but did not withdraw my accumulated balance for FOUR YEARS thereafter.
Then I applied for full withdrawal and received the balance amount less TDS. No problem with that.
However, on scrutiny of account statement I find that INTEREST ON ACCUMULATED BALANCE was credited only for THREEYEARSAFTER I RESIGNED FROM MY JOB. I read at the following link that interest should continue to be paid till the age of 58. https://www.basunivesh.com/2017/11/17/tax-on-epf-after-resign-retire-or-terminated/
Is this provision of continued interest till 58 years applicable to those who have contributed for less than FIVE years? If yes, in your opinion will it help to apply to EPFO at this stage for recalculation of interest and payment for the period beyond three years?
Thank you.
Dear Manish,
If you withdrawn the money before this new notification, then you are not eligible for any interest.
Thank you.
Have withdrawn the money only last month but I did not know about this notification. Can I make a claim for rectification?
Thanks
Dear Manish,
I don’t think now they entertain.
I joined a Company in January 2014 at the age of 56 years. I continued my service till March 2016 and resigned. The Company had recognised PF Trust. After resignation at the age of 58 years 3 months I did not work any where till September 2016 and from October 2016 I am working in an academic Institution where PF is not there so I can not transfer the PF now. My question is:
1. I wish to withdraw my PF at my current age of 60 years and 5 months–whether it will be taxable?
2. If taxable can I get any relief in terms of dividing the contributions and interest for the year 2016-17 when my income was nontaxable?
Dear Sremmant,
1) As your EPF account is not more than 5 years old, it will be taxed.
2) NO.
Thanks very much for your quick response. However, there is no consideration to the fact that I completed 58 years of ages to get the tax exemption?
Dear Sremmant,
Sadly NO.
Post Retirement how long can one keep EPF money with EPFO ?
Is the interest accrued on this post retirement date – taxable?
How do I calculate and pay the tax?
(If a person retired in Jan 2017, and has not withdrawn the EPF accumulated amount till date, how long can he keep the account active with EPFO without withdrawing, what are the tax implications, how to calculate tax, if any. After paying tax, how long can I keep the account active)
thanks
Dear SPS,
Refer my latest post in this regard “Tax on EPF after resign, retire or terminated“.
Dear Basavaraj, Thanks for the quick reply and links to the complete write-up.
To reconfirm, tax is payable on interest accrued on EPF.
After going thru the links and write up, have another query – The retirement age is being seen as 55 / 58, however what happens if person keeps working and contributing into EPF till 70 as a normal employee.
Is the treatment any different or is it the same with only retirement age shifting to 70 instead of 58.
thanks and rgds
Dear SPS,
There is no clarity in this front from EPFO.
Hi Basavaraj,
I have recently moved to Canada and would like to know whether i would be charged with TDS @10%?
In India i have worked for less than 5 years.
Thanks
Nayay
Dear Nayay,
In that case the above shared TDS rate will be applicable.
Thanks. Appreciate the quick response.
Hi,
Di i have an option to withdraw pension contribution as now i have a NRI status.
Thanks
Nayay
Dear Nayay,
If you not completed 10 years of service, then you will receive part of it as per EPS Table D.
ok That is strange as by that time (10 years) i would not be an Indian citizen so i cant hold Aadhaar so i can nothing about my money. Right?
Dear Nayay,
It is 10 years contributory period but not 10 years age of EPS.
ok Got it. Still it got deducted from my salary but i am not entitled to get it back.
Employee’s contribution is Not Taxable is wrong explanation..
I think it should be Employee’s Contribution is not Taxable Separately Again as it is assumed to be included in Salary…
Setu-Separate again is missing as per you right? But this what I meant to say 🙂
Hi Basavaraj,
I recently noticed that my 26AS form consist of an entry on income under “Other” by previous employer Provident Fund and a 10% of TDS. I checked my bank account and PF statement and didn’t see that amount. I have not withdrawn or transferred the PF from previous employer. My previous employer is a Trust Fund and an exempted organization. Due to this mismatch in income, IT dept has sent me an inquiry.
Could you please suggest what needs to be done in such case.
-Rakesh
Rakesh-If your past employer is a trust, then contact them for this mismatch and try to rectify it.
Hi Basavaraj – 10% TDS was deducted on my recent PF withdrawal, currently I’m not working.Just wondering if I can claim TDS refund as my income is not taxable for current FY.
If yes could you please let me how to go about it. As in how to get TDS certificate on PF or so.
Rohith-Yes, you can claim it by filing IT return.
Hi Basavaraj – 10% TDS was deducted on my recent PF withdrawal, currently I’m not working.Just wondering if I can claim TDS refund as my income is not taxable for current FY.
If yes could you please let me how to go about it and in which head head i have to shown this income
Pf withdrwal amount is 376604 and tds deducted amount 37660
Dear Imran,
Yes, you can claim the deduction. Regarding how to claim, you have to show this under the head of Income from Other Sources.
Hi Basavaraj,
Thanks for the useful articles you have published. I am not sure if I missed the information I am trying to figure out. My question is what is the tax treatment of employee contribution and employer contribution, if the individual contributions happen to be more than 1, 50, 000 (which is the limit of 80C)?
Thanks in advance.
Ayan-Up to Rs.1.5 lakh can be claimed under Sec.80C and rest can’t be.
Thanks for your quick reply. May be I was not clear on my question. The question is not about 80C.
Somewhere I had read that the employer contribution in excess of 1.5L would be treated as taxable income in the hand of employee. Is that true? It would be nice if you could highlight any news regarding this.
Thanks
Ayan-There is no such rule. However, please refer above table. Only it is mentioned that employer contribution more than 12.5% is taxable income in the hand of an employee for recognized EPF.
Hi
If I continue my EPF balance even after retirement( 60 yrs ) and not withdraw it , whether the interest earned is liable for taxation ?
Anil-Refer my latest post “Tax on EPF after resign, retire or terminated“.
Hi,
I withdrew EPF in FY 16-17, before completing 5 years of service. I had 3 questions –
1. Employer contribution and interest on it – is this taxable in the year of withdrawal or the year in which the amount was contributed?
2. Interest on employee contribution – is this taxable in the year of withdrawal? Or in the year in which the interest was earned?
3. Employee contribution – over here the section 80 C benefits had to be reversed. Does this mean the previous year returns have to be revised? Or can the entire EPF amount be added to the current year (withdrawal year) income?
Mohit-1) In the year of withdrawal.
2) In the year of withdrawal.
3) It has to be reversed.
hi the employee contribution has to be revered means? Could you please elaborate it?
That means
The Income under salary head will be increase by the amount of employer contribution
Income under Other Sources will increased by the Interest amount.
and for the employee contribution where we have to mention?
Roopal-Reversed means whatever the tax deductions you opted earlier will be added back to as your income and taxed accordingly.
Hello,
I worked at TCS (Tata Consultancy Services) for 4 years i.e. till Mar’ 2016 & they had deducted PF during my period of service. After that, I changed my Job & my current company has opened a new PF account. For the FY 2016-17, TCS has deducted the TDS on Interest accrued on PF. Will this Income be taxable as Income from Other Sources for FY 2016-17?
If I transfer my TCS PF account to the current PF account before the due date of filing my return for FY 2016-17 can I claim it as exempt Income for FY 2016-17 ??
Please help
Komal-How can they deduct TDS for your EPF when you are claiming that you have not withdrawn it? Check with your previous employer regarding reasons for deducting TDS. It is not according to EPF rules.
Thank you sir for your quick reply.
TDS has been deducted on Interest accrued on PF. Is it because I have two PF accounts..??
Komal-NO. TDS will come into picture when you apply for withdrawal.
Hi Komal,
Were you able to get it rectified from TCS?
Regards
Rishi Jain
Suppose a person withdraws EPF of Rs. 24,40,000 after 2 years in service, out of which 11,67,000 was Employer’s and employee’s contribution each and rest was interest. Now out of this, Employer’s contribution of Rs. 11,67,000 shall be taxable as Salary and Interest shall be taxable as Income from other sources, and Employee’s contribution to the extent it was not claimed as deduction under section 80C shall be shown in Exempt Income.
However, the EPFO has deduction TDS of 10% on the entire amount and has shown it under Sn 192(Salary) in 26AS.
My question is, how do I show this in ITR 2? (cannot file ITR-1 as assessee needs to fill Foreign Assets schedule too).
If I show the only the taxable income (i.e. employer’s contribution and interest) in Schedule OS, wouldn’t the AO raise a demand on account of mismatch with Amount Paid as shown in 26AS?
Please guide.
Mihir-Please refer the above post properly. If your tenure is less than 5 years, then such withdrawal will be taxable income for you.
Sir,
Is the pension received under EPS 1995 taxable ? If yes, who will give the form -16 ? Bank paying the Pension or the EPF office ?
Thank you.
Parag-Yes, it is taxable. Check with EPFO.
Sir,
Thank you for your prompt reply. I just now called EPF Pune Office, asked about Form-16. The PRO (phone#:020-26449150) told me that it is not taxable so there is no Form-16.
What will be your advice ?
Thank you.
Parag-If your EPF is less than 5 years, then it is taxable. If not, then you have to show it under exempt income.
Thank you.
Hello Sir,
Very informative article. Thank you for that.
I have gone through many articles related to income tax implications on EPF withdrawal before 5 years and have few doubts. I’ll be grateful if you could clarify these:
1. “Employer’s contribution and Interest on employer’s contribution are taxable” How to calculate this tax? Should I simply add both these components to the salary of FY in which I withdrew PF? Or should the tax be calculated by adding these two components to the salary of respective FY in which it was received?
2. “How to consider Employee’s contribution for taxation? Should I deduct the exemption I have received in respective FY in which it was received and re-calculate tax for those years? If yes, Can I do this by just adding Employee’s contribution to the ‘total taxable income’? Similarly, How to account for interest on employee’s contribution?
3. How can I use section 89 to claim relief here?
4. I’ll take this example: I withdrew my PF in June 2016. Total amount 499000. this was the PF I earned from Jan 2013 to Mar 2016. My current Form 26AS is showing this withdrawal and TDS as 49900. Now if I add this amount of PF (499000) to my salary, its showing a tax demand of approx. 120000.
Can you please help me understand how to file this ITR now?
Many Many Thanks in advance .
Rohit-1) You have to add it to your salary income of respective years if it is more than 12% (as I pointed above).
2) It is regarding?
3) Section 89 reates to arrears and not for EPF.
4) You have to show as income in the year in which you withdraw the EPF. The taxation will follow according to that particular year’s taxation.
In Point 4,
If I show pf amount I received as income of FY 2016-17, Tax will be calculated @30% as I am in 30% slab now.
On the other hand, I have read in many articles that income tax is calculated according to tax slabs of the FY when pf was earned.
For point 2. It is regarding income tax on pf withdrawal only. I have withdrawn my PF in june 2016. Now I am filing my ITR for AY 2017-18. Hence want to know how tax will be calculated and how to show income and tax in ITR-1?
Rohit-Assume you calculate based on the year you earned. Now the question is how you show this earning for your past income and avoid tax? I am not sure who shared this. If your EPF is less than 5 years then you must show it under the head of Income from Other Source and claim tax. If it is more than 5 years, then you must show under exempt income.
So, If I have received Rs. 5 lakhs pf in June 2016, I should show it as income from other sources for FY 2016-17 and pay tax according to what is calculated. (which will be 30% slab).
Rohit-Yes, you have to include it in Income from Other Sources (If your EPF is not more than 5 years old) and pay the tax as per your tax slab.
I want to know:
If the total employee’s contribution for a year is more than 1.5L, will it be taxable?
Priyanka-Taxable in what sense? At the time of withdrawal?
Hi
I have withdrwan my PF from my old company which I did not complete 5 years, now I got form 16 from my old company. As per rule I am liable to pay 10% from the EPF. Now while file return with my both form 16, them old company form 16 which I withdrew my EPF then it is adding with my current income and asking to me pay extra tax which comes in 30% of the slab but as per rule it should not be more than 10%. With my current company I have paid allthe taxes.
My question is that in which section I should mention my EPF withdraw amount so that I should pay the tax 10% as per standard. Bu default it is calculating in 30% slab
Regards
Markan
Markan-Markan-TDS @10% does not mean your tax liability ends there itself. You are falling under tax bracket which is more than the rate at which TDS was deducted, then you have to pay the additional tax. You no need to mention in section, but show this income as “Income from Other Source” and then calculate the tax liability. At the end you have to show the already paid tax through TDS.
Dear Basavaraj,
Thanks for the reply.
But on withdrawal, they are asking for TDS on total @ 10%.
Secondly, If I retain it, then after how many periods it will be tax-free and whether interest will be credited in this account or not in future.
Rajesh-They consider the age of EPF based on the number of years the contribution was done. Hence, you can’t skip TDS.
I have resigned from my current organisation which is registered under Recognised Provident Fund. Currently, I am contributing to this. But my new organisation has less than 10 members so they are not registered with PF. Now, suggest me for further action to keep my fund intact.
Rajesh-Either you can retain it or withdraw it.
Hi , I worked in an MNC firm for 72 months and have now resigned. During the past 19 months I was on unpaid leave to pursue my master’s education and thus my pf contribution was zero. The firm is now saying that only 51 months of my service will be considered and thus my PF withdrawal will be taxable. Can you please advise if this is correct, as I was on the pay rolls of the firm for all the 6 years and am withdrawing my pf only now at the time of resignation.
Gurpartap-As the EPF contribution is only for 51 months, your withdrawal will be taxable.
Basavaraj: Thanks a lot for your reply, what will be the tax % applicable and will it be applied on both employer and employee contribution?
Gurpartap-Refer my old post “Taxation of Employee Provident Fund (EPF)“.
Hello,
If an employee contributes more than 12% of their Basic salary to the EPF, what is the tax treatment for the excess contribution (i.e. beyond 12%) to the EPF? Is the principle tax free on withdrawal at retirement? Is the interest on the employee contribution beyond 12% tax free at retirement?
Sandeep-It is considered as Voluntary Provident Fund. Tax treatment will be same as that of EPF.
Sir,
I was working in company X for last 5.5 years after doing my graduation. They have also deducted for my PF A/C since last 5.5 years. But now, During my resignation they have taken into account 1 year as training period, due to which they are showing my service record of 4.5 years. I have not joined any other company as I have enrolled myself in post graduation course, so transfer of PF A/C is out of option for me
So will any tax be deducted during PF withdrawal, under such circumstances.??
Arnab-If your EPF account shows the contribution of 5.5 years, then no matter what may be your designation, the tenure of EPF is considered as 5.5 years only.
Sir – is it permissible to split up employees’ wages to reduce tax liability? Have the courts ruled on the same?
Preethi-Tax liability for employer or employee?
Hi Sir,
Recently I’ve applied for EPF withdrawal but it was rejected saying my salary is greater than 15,000.
Could you please let me know how to withdraw EPF in this case.
Thanks and Regards,
Vijay
+91-9844276737
Vijayakumar-Rejection reason your salary?? I don’t think so.
Yes Sir.. In 2015 I joined a new organisation where I quit after working for 1.6 years. After 2 months I applied for EPF withdrawal but it got rejected saying “As your Salary was more than 15,000 (Basic+DA) not eligible is the reason.
Could you please advise on what needs to be done?
Thank you,
Vijay
+91-9844276737
Sir withdrawal of EPF by Famliy on death of employee is taxable?
Mudit-It is tax-free.
Sir even if the employee has rendered only 4.5 years of service?
Please specify the section of Income tax act related to it.
Mudit-You search in EPFO regarding TDS.
Hi Basavaraj,
I have been part of one of MNC for last 5.9 years and moving to another company who is also fit for PF ACT. I wanted to close the previous company PF account.
1. is that possible to do so.
2. if yes, whether I can get full amount without TDS deduction.
3. if its not comes under TDS exemption , what will be the rate of deduction.
Please advise
Sethuraman-1) NO
Is the employer contribution 12% is exempt from taxable income for the employee? or employee have to pay tax for the employer contribution 12%?
Alagappan-You no need to pay tax on employer contribution.
Hi basavaraj,
I resigned from my job before completing 5 years.I have applied for pf withdrawal.i have submitted pan n form 15g as well. The income for the year when I applied for with draw is with in the tax limit.but still tax is deducted..can I apply for refund of tax?
JS-If your income is less than the basic exemption limit and still TDS deducted, then you can claim for refund by filing IT return.
Hi,
Thanks for the updated video.
I have the below query.
I worked in an organisation from may 2013 to April 2015 and not working from then on. Along with the EPF, I contributed for VPF as well.
Now my PF balance is ER : Rs. 61904 and EE: Rs.187866.
I am confused as what to fill in the column 16 and 17 of the new form 15G
Column 16 : Is it the total income of the financial year 2015-2016 or the PF amount which I am going to wothdraw ? If it is the PF amount, should I include the volutary PF amount as well?
Please advise.
Thanks,
Kani
Kani-Column 16-Income of EPF total amount. Yes, you have to include VPF amount also.
I worked for a company for 4 years and after some break, I joined a startup company which does not come under PF due to size. It is over 3 years since I left company where I had PF account and my PF is still lying there.
I am not sure whether my current company will have PF account in future or not. I am not in urgent need of money what I need to decide on for PF balance.
– if I withdraw would it be taxable (I had 4 years of job but now it is 7 years of account opening?)
– If taxable, can I transfer to NPS or any government fund where it is not taxable?
Thanks in advance
Rajeev-Yes, it is taxable. You can transfer to any other Govt funds as of now.
I have worked for 2 years 2009-2011 and didn’t withdraw the EPF till now . the provident + pension amount is around 55K and submitting the forms now. I will be having earnings through salary around 3.7L in this year (3.7+55) but i have other declarations like house loan principal and interest so the tax will be null , in this case can I fill form 15G ? if not will tax will be applied on 55K or 5K ?
What exactly I need to fill in columns16, 17 in 15G(expected and the total ).
Thanks,
Shyam
Shyam-If you are currently working, then you are not allowed to withdraw. You can only transfer it.
Hi ,
Here we dont have PF account.
Any Updates ?
I left my company. I contributed to RPF for more than five years. but at withdrawl they showed it in my 26AS as salary and also deduced TDS on it. So whether I should pay tax on it or show it as my exempt income.
Pankaj-As per EPF rules, if your EPF is more than 5 years old, then it is tax-free.
I have worked for 4.5 yrs in a Co. I have received 410213 from my PF withdrawal on which TDS has been deducted. But I dont have bifurcation of interest and contribution to it. How should I show it in computing my Total Income and where? Wether the full amount is taxable ?
Harsh-Full amount is taxable.
Hi Basavaraj,
I worked in a company A for 2.5 years having PF account. Later moved to company B and worked for 1.5 years where I don’t have PF account. Later I moved to Company C where I worked for 3.5 years having PF account and transferred from Company A. I left the company now and withdrawal the PF.
Since I am having PF contributions for total 6 years with a break, will this amount will be exempted for Tax? Now PF office deducted 10% tax at the time of withdrawal. Can I get this amount as refund? where Can I show the withdrawal amount while filing ITR 1? Please help me further.
Thanks in advance
Raju-If the contribution is more than 6 years, then it is tax-free. You have to show this under exempt income.
Thank you very much for your quick reply. Hence 10% TDS deducted, could you please suggest me where exactly I can show this as a exempted income while filing ITR 1. Or Do I need to file any other other form and could you please suggest me the exact section to keep the amount which I withdrawn.
Please suggest me further. and Let me if you have any way to reach you. Hope you know my e-mail ID.
Raju-I can’t explain the whole filing process in comment section.
Will there be anyway to consult you, It will be great help for me.
my mobile number is 9490469062
Hi Basavaraj,
Thank you for your valuable feedback and clarification:
I have the below query, I worked in a company A for 2.5 years with PF account and moved to Company B without PF for 1.5 years. Later I moved to company C having PF account worked for another 3.5 years and transferred from company A. After leaving the company C, can I withdraw PF without tax since the overall service is more then 5 years even though there is a break.
at the time of withdrawal 10% of tax deducted. Can I get it as refund and where can I show this amount as exempted amount while filing ITR I. Please suggest me further.
Raju-Replied to your earlier comment. Please check it.
Dear Basavaraj,
I was in Company A for about 11 years and then left and joined company B in October 2014. I transferred my EPF to new company. Both companies have PF trust.
I left Company B after 4 months in Feb 2015 and joined company C but my EPF is still with company B.
I see in form 26AS that they have deducted 10% TDS on interest for FY 2015-16. Is it correct? I have not done any withdrawal.
Regards,
Alok
Alok-Without withdrawal request how can they deduct TDS?
Yes that’s the doubt. But they have done this and it’s there in Firm 26 AS. Please suggest how I should proceed?
Alok-You have to raise the issue at EPFO and IT Dept too.
Sir I have withdrawn my EPF after a service of 4 years and 2 months in the last financial year. Despite of giving for 15 G department has deducted 10% TDS on my total amount and they have refused to entertain my case and said that the same i can claim while filling ITR .
In total I have received an amount of INR 305288 & 25935 and total TDS deducted is INR 339209 which is also visible online on 26 AS & ITR website . Now my problem is that what amount i should add in the income from other sources.
I have the EPF pass book updated till 19th June 2015 showing employee contribution 151756 and employer contribution 125093 and 17853 towards pension contribution. please sugegst
Vijay-It is taxable income and where you have to mention is explained in above post.
for FY 15-16 I left my job and withdrawn my pf , 27 month job
my total salary -3.75lacs
my contribution to epf -84063 nd interest on it is 4399 =total 88462
employers part – 28945 nd interest 1471=30416
total amount is 118878 showing in settlement for epf
now how much i have to show in itr as income from other sources … ?
Amit-The amount you withdrawn and the sources of income heads are explained in above post.
Employee’s own contribution is not taxable but the interest thereon is taxable under “Income from Other Sources”. Both employer’s contribution and interest thereon is taxed as “Income from Salary”.
this is what u said above .
so acc to you -income from other sources is interest on employee contribution interest which is 4399 nd rest of employer contribution nd interest will add up in my salary which is 30146 +3.75 lac…
so 84063 amount of mine will not come in itr filling ?
Amit-You have to show it as exempt income.
Above same case with me also regarding my pf withdrawal.
Please suggest how to show the Employee, Employer contribution & interest in ITR in which head. Also can we show the employee contribution in section 80c .
Please reply
My whtapp no. is 9991299439
Dear Sir,
I have submitted my PF Claim along with with Form 15 G but then too my tds @ 10% is deducted.After submitting Form 15 G is tds applicable? How would I get TDS certificate from PF Office for claiming refund.
Prajakta-How can they deduct TDS even after submitting Form 15G? TDS form is available online of IT Dept. You can download from there.
Received EPF in FY 2014-15, on pre mature withrawal from EPF account.
How tax concession received earlier is taxable, under which head. As in Form 16 issued by EPF trust they added it in the tax amount.
Please suggest. Thanks
Ankita-Without knowing your service period, it is hard for me to guide. Refer above post for clarity.
Thanks sir
Service period : joining date 03/05/2010, leaving date 01/06/2013
Ankita-It will be taxable income.
Thanks, but under which head.
Ankita-It is already explained above.
I worked in an organisation (PSU) in 4 years where epf deducted and deposited in epf account.after 4 years i have joint some new company where epf is not deducted .If I hold the account & not withdraw the amount of EPF .Is it taxable after 5 years .
Anku-Forget about taxation, read this new ruling “4 EPF withdrawal changes effective from Feb 2016“.
I joined on 14th aug 2009 and left on 1st Aug 2014. What will be tax implication for epf redemption. My PF got deducted for 60 months(5 years) but my actual service period is short of 5 years by 13 days. Please clarify. Thanks
Ashish-Please read the recent changes for withdrawal, then proceed “4 EPF withdrawal changes effective from Feb 2016″.
Hi Basav,
Thanks for the link. Got few more clarifications from there. But my original question on the terenure of my service still remains. WIll appreciate if you can have a look again.
And big thank you for all the advice that you are providing here. A big thumbs up.
Regards,
Ashish
Ashish-That is what I pointed, you can withdraw.
Hi Basavaraj,
I got my PF amount 88K withdrawn from my last company in august-2015. Do I need to show it somewhere? If yes, Where excatly can I show that while submitting my tax form? Under “OTHER INCOME”?
Also, How shall I know that how much interest I earned on my total PF amount which would be taxable?
Please help !!
Nishant-According to your EPF age, I already explained above. Please read.
I joined on 01st Nov 2010 and left job on 7 oct 2015.. does this mean i have compeleted 5 years. Will tax be levied on pf??
Amit-YES.
I worked with an company during the period March 2005 to August 2012 and then been acquired by another company by August and i quit the acquired company by Feb 2013. I have received the PF settlement for the period Aug 2012 to Feb 2013 but amount pertaining before acquisition is still pending. My PF withdrawal had been rejected for 4 times and i have raised a grieveance for 3 times. Per resolution they ask to resubmit the PF withdrawal form but again they reject the form stating “settlement had been made”. recently on jan 2016 i received a mail stating to submit my PF withdrawal form along with Form 15G. I have worked for more than 5 years in the company and my withdrawal amount exceeds Rs.30,000. Should i need to shubmit Form 15G? if so, what should i fill in column 16 & 17? Please advise.
Thanks in Adavance.
Samraj-You no need to submit Form 15G.
Hello sir – This is how my breakup of my service in the last 18 years with the various companies:
Nov 1998 to August 2004 Company 1 with PF;
August 2004 to July 2006 Company 2 with no PF option; Withdrew the PF money from Company 1;
August 2006 to June 2009 Company 2 with PF option;
June 2009 to March 2011 Company 3 with PF;
April 2011 to Feb 2014 Company 4 with PF; Company 3 & Company 4 PF’s are merged;
Mar 2014 to Feb 2015 1 year break ; Running a startup;
March 2015 to Sep 2015 Company 5 with PF;
Please let me know if am eligible for Tax dedcution if I close the PF account where company 3 and company 4 PF’s are merged(where my continuous service is less than 5 years, but overall continuous service is more than 5 years);
Raghu-They consider contribution period.
Does that mean for Company 3 & Company 4 PF’s(June 2009 to Feb 2014)- I have not completed 5 years of continuous service and my PF maturity is taxable?
Raghu-If you not completed 5 years, then yes it is taxable.
Hi Sir, My EPF Balance as on 31-Mar-15 is 2.6LacINR (EE-1.43+ER-1.23) and i am submitting withdrawl request for total amount as I am not Employed any more.
Will I be eligible for Form15G to avoid TDS?
I have also recieved salary income of almost 1.7LacINR during the same period.
Kindly advise also how to calculate Estimated Income & Estimated Total Income for Form15G?
Just to add on I have worked only for period of 3 years with last employer
Gudiya-You have to calculate the total income of your salary (if you are currently employed)+the EPF amount. If your current income is more than Rs.2.5 lakh, then you can’t submit Form 15G.
I am getting only 10k salary per month that I have worked in a company…I am not a income tax payee..now should I have resigned my job..applied for pf… I may get a maximum of rs 55000 of pf money…but when I submitted pf form the company guys r telling I must submit 15 g form..how to submit 15g form as I have not paid income tax as my salary is only 10k….Please help me..
Dharshan-The withdrawal amount is taxable income for you. They will deduct TDS on it. Hence, to avoid the TDS they are asking you to submit Form 15G. One must not be taxpayer to submit Form 15G. Understand the logic of taxation, TDS and Form 15G submission.
Hi,
I am working in an IT company for more than 5 years and my basic salary is more than 6500 (current basic salary is 17K). I have EPF account.
But i want to close my EPF. is it possible to close my current PF account and withdraw it thru my current employer.
And if before closing my current PF account, if i switch to other company, can i opt for non PF account ( i mean no pf account to be created) in new company.
And if I opt for Non PF account in new company then How can withdraw my EPF and EPS amount with gratuity amount as well.
Thanks.
Mohammed-During job you can’t close your EPF. If you switched to new company and your basic salary is less than Rs.15,000 also employer covered under EPFO means you have to be EPF member.
Hi,
Can you please tell on What Amount PF is deducted. It is Basic Salary + DA or only Basic Salary.
Also, is there any requirement under PF Act as to structure of CTC i.e. minimum amount which should be basic salary in the CTC.
Waiting for reply.
Abhishek-It is on Basic+DA. There is no such rule to structure CTC. It is purely an agreement or understanding between employer and employee.
Hi,
I worked with my previous company for 4.5yrs and then joined another. My Current company does not have PF. What should i do so as to not to attract tax on my PF?
Please advise
Roshni
Roshni-In that case, better to withdraw.
Hi. I too have the same issue with 4.2years in my previous organisation . And the current does not have epf.. Is there any way I can save tax on this money for eg by continuing my account till 5 years April so.. Please advice..
Nitin-It is contributory period that matters.
Hi Sir,
Please help me to sort out my doubt.
I have withdrawn PF from my last employer and after relieving from my previous company i joined new company within 10 days.
What will i do as per the rules we cann’t withdrawn PF if we are not working for 60 days.
My relieving date from previous company: July 17th, 2015.
Joining date of new company: July 21st, 2015.
Please help..!!
Regards,
Devashish Gupta
08971949979
Devashish-We already discussed through our chat. Do as directed.
Hi , I withdrawed my PF from Nokia private trust where i workied for only 1 year 2 months . I was supposed to get 1,27000 from the PF amout but they deduced TDS of 38000 from my account and provided me only 85000 . I had worked in other company before that for 3 years complete and left nokia by 2011 august. I applied for withdrawal only last month i.e. sep 2015 . They deducted 30 % direct tax when they had my PAN number details with me. Is it valid???
They refused my claim or even answer my email stating they are private EPF trust and 30 % is compulsory deduction. I worked till 2011 for 4 years 2 months and applied for PF withdrawal now ..
Vrushali-They can’t do TDS at 30%. It is purely wrong. You can raise the issue with EPFO and IT Dept.
Vrushali,
I also worked in Nokia India Pvt Ltd till Nov 2011.
But now when I am trying to check my PF number from EPG portal it gives me error.
I beleive there must be some other way to deal with Private PF Trust.
Can you please guide me how to process PF Withdraw from Nokia India Pvt Ltd.. My PF starts HR/GGN/I/28609/****
As now Nokia is closed so not able to reach any staff there.
I have my salary slip with PF number on that.
Please help, how did you process ?
Thanks,
Nitin
I worked for 16 months and my pf balance is around 17000 . I absconded that company . So will i get my pf amount??
If yes, what is the procedure for it ?
Could you please reply soon.
Everest-If you are currently working then you can apply for online transfer.
But what if the company in which i took a job doesnt have pf contribution .
And how do i remove it .
Everest-If the employer not falls under the EPFO, then you can withdraw the earlier EPF.
Hallo Sir, I am currently working in a PSU (having EPF facility) from August,2014. Now, I am selected in Indian Railways and expecting to join there in a few months. In Railways, there is no EPF scheme but NPS. Now, what will happen to my EPF account?
1. Can I transfer the money to NPS?
2. If not, is it mandatory to withdraw the money or can I keep it in EPF to complete 5 years?
3. If it is to be withdrawn, what will be my tax liability?
Please guide me in this situation. Thanks to you in advance.
Indranath-You have no option but to withdraw. Tax liability is already mentioned above.
Hey, doesn’t the PSU provident fund comes under statutory provident fund as it is semi government?? Thanks for help
Ankush-Check with your employer or regional EPFO.
sir,
after completing 4.11 years of service i resigned last year for further studies and i withdrew my PF amount on which my company has deducted TDS , i have to file return for AY 2015-16 and as i am a student now with no other source of income can i claim a refund as my income was only the PF and some other payment by my employer.
and will my filling not lead to a situation where IT department demands me to re-file my returns for the past years on which i claimed benefit under 80c from my EPF contributions.
Kamal-If your taxable income is less than what they deducted as tax, then you can file IT Return and get the refund. Because of Sec.80C reason only now your EPF is taxable for you.
Hi,
I have worked in a company for 3 yes and resigned. After resigning I haven’t worked anywhere and my ER balance is 31000. I am planning to withdraw PF. Do I eligible from tax exemption and for form 15 G?
Narendra-NO.
HI,
I resigned from a Company which has RPF for employees. After my resignation it took 3 months to get the PF funds transferred from previous employer’s RPF to new Employer’s RPF account. Previous company deducted TDS on the interest amount for the period form the date of my resignation till the date of transfer to new Companies’s PF account. They say that after my resignation I cease to be member of their RPF hence the interest earned from the date of resignation is not earned by me as member of RPF hence it is taxable. Please suggest if it is correct.
Ashish-You transferred the account but not withdrawn. Hence, they can’t deduct the TDS.
If the employer has already deducted the TDS which as per your reply should not have been, what is the remedy I have now? Should I claim this amout for refund; if yes then how? Where should I show that interest income in ITR1 or should I not show that at all as my income as it has directly been credited to my PF account and not to my bank account?
Saurabh-While filing IT return you can show it under the heads of income which I explained above.
Request you to be a little more specific. The interest what I am talking about is actually I have never recieved in my Bank Account. That has directly been credited to my PF account which is in transit from my PF account of earlier employer to PF account of current employer. I have never withdrawn a single rupee from my PF account and I don’t have any such plan in near future also. I am unable to understand when I have not withdrawn anything how can I show that as my taxable income? Is there any place in ITR1 where I can show my non-taxable income?
And just a request is it possible to contact you directly?
P.S. : In my earlier organisation I had completed 6 years.
Saurabh-In that case it is wrong TDS. Because the account is just transferred but not withdrawn. Hence, let your old employer rectify it. You can’t show it in your ITR as you not realised it.
Is EPS taxed? I worked for 4 yrs and 6 months. I quit in 2005 and got my EPS now 2015. Will I be req. to pay tax on it?
Karthik-Check my earlier post on this “The complete guide to Employee Pension Scheme (EPS) 1995“.
Hi,
I joined my previous organisation on 26-11-2008 and resigned on 20-12-2013. Joined current organisation on 23-12-2013. My PF transfer claim is still in progress. I could see that tax of 1423 is deducted from my PF account managed by previous organisation. Is PF or interest on PF taxable after resignation?
Sikha-I am not sure why they deducted tax. Because when you transfer EPF then there is no tax liability on you. Check the same with your old organization.
Thank you Basavaraj.
Hi,
I got some amount on withdrawal before 5 years of employment. Will the amount of employer contribution be taxable under salary at the usual rates of tax considering only the current year’s income tax rates applicable? or it needs to be calculated retrospectively considering each and every year of employment and the then applicable rates?
Similarly, what rates to be applied for the interest on own contribution when taxable under income from other sources?
Thanks & Regards,
Mehak.
Mahak-It is as per your current tax slab.
sir i was in job for last 2 years and after giving resignation i withdrawn the EPF . is this amount taxable in this financial year?
Manish-Yes.
Hi,
I have completed 10 years of service in a single organization. As I understand, the PF withdrawal should not be taxable in my case. When I called the PF office, I was told that there will be a TDS of 10% for any PF Withdrawal amount greater than 2.5 lakhs even if the service is more than 5 years in a single organization. So if my PF amount accumulated is 10 lakhs in 10 years, then 10 lakhs-2.5 lakhs = 7.5 lakhs will be taxable at 10% (Tax of about 75,000 INR).
Is this true? Can you please clarify
Jag-It is not true. Please check the latest news which I published in my blog at “EPF Withdrawal Taxation-New TDS (Tax Deducted at Source) Rules“.
I am in continuous service in the company that I am currently employed with for over five years.
However the company started the Employees scheme only three years ago.
I shall be retiring on completion of 65 years of age in a month from today.
Will the amount I receive by way of my contribution, company’s contribution and interest be subject to tax upon withdrawal of my Provident fund subsequent to retirement?
Clive-It will be taxed.
Thanks – noted Regards
I retired from services at the age of 63 years in November 2014.i once withdrew @ 70000 f0r housing purpose 20 years back.
in may 2015 i applied for E PF withdrawal . Through my last employeer. I am told there are some doubts regarding TAXing of EPF and as such they were not accepting withdrawl form.Now i am given form 15G and 15H and is asked to submit the forms with application fro withdrawl.
i am told even if i submit they may cut tax.
i want to know whether E PF is really taxable as per income tax act.if it is taxable then whatever saved in 40 years will go go in tax to the extend of 34%. kindly explain how it is.
thanks,
Sridharan
Jambunathan-Please read above clauses once again. This applies to you too.
Hi,
I left my previous company in 2009 and forgot to transfer PF. Tried transfer to new company but some technical or process issues and did not happen. I forgot to follow. Now saw news about unclaimed EPF. If I withdraw now, will I be taxed. I am about to leave this company and need money. So will withdraw of old EPF incur any tax.
Musafir-You can’t withdraw (if you want to continue your job). Taxation rules applies as I said above.
Hi ,
I moved to new company in 2 months back. And I worked 5.4 years in past company in situation of latest company acquired by previous company and PF transferred internally).Can you suggest is I am under TDS Slab? Please note that withdraw amount is >30000.
Surekha-They will not deduct any TDS.
(1)I resign from company after 4 years.
(2)Kept EPF as it is till one more year till my money completes 5 years in account
(3)After 5 years apply for EPF withdrawal.
Now i completed 5 yres of my PF a/c, but last 1 year not on service.
still will it TDS deducted?
RAvi-Whether escaping from TDS means escaping from taxation??
With my last employer I have a PF account which is over 9 years old which I withdrew in 2014-15 as I am now self-employed. My query is related to the interest earned in the six months after my leaving the company and my withdrawing the PF amount. Is this additional interest paid during the six months taxable. The company has paid the interest but not deducted TDS on the interest paid. Need this clarification for making the tax payments for Fin Year 2014-15.
Padmanabhan-Please read 3 point in above post.
It is not clear. Is the interest amount received in the interim period between resigning and withdrawing the PF amount taxable or not ? The reason I ask this question is they have not deducted any TDS on the interest paid. Please clarify as clearly as possible to my e-mail id above.
Padmanabhan
Padmanabhan-TDS to EPF started just few days back.
Sir
First of all congrats and thanks for your nice job.
My clarification part is on EPF amount retrieval.
In pension amount there are three parts employee contributions,employer contribution and pension found in PF passbook.
My monthly contribution is 1800
Employer contribution is 1250
Pension part is 550 mentioned in passbook.
While retirement (after 54 yrs) how much will I get?
Example
Employee contribution amount is 30000
Employer contribution is 20000
Pension part is 10000.
Total amount in PF account is 60000.
Will I get all rs 60000?
Kindly reply to mail I’d uthai_Sivan a yahoo.co.in
Uthayakumar-How much you receive as pension not depend on now itself. It depends on calculation considering all values to arrive at a pension. Hence, I am unable to guide you at this point of time.
We are PSU. we have our own RPF. if trust wants to pay the more interest to the members than the rate of interest declared by EPFO then whether this additional interest credited to members account is taxable or not?
please suggest.
Prabhu-I am not sure about this.
Dear Sir,
I have worked for a software firm for 4.1 years and then left my job to do MBA. I have 3 questions to you:
1) If I keep my PF account for 1 years to complete 5 years and then withdraw the PF , Will it be taxable ?
2) If I keep it for 2 years till my MBA gets complete and then can I able to link the PF account with new employer ?
3) It is wise to withdraw my PF now as I wont get any benefit as 5 years continuous service holder ?
Sir,
Can you please tell me how much money will be deducted from Rs -180000 /- PF if I withdraw before 5 yrs. Thanks.
Sandip-It depends on case to case. How can I say generically?
Sandip-Please read the note 2 to get the clarity. You discontinued yourself. So where does the tax exemption arise? Yes if you continue your job later and transfer the old account with new employer then it is called as continued service (which includes earlier 4.1 years of service).
Hi,
I have just left a BIG PRIVATE MNC company after working for 16 months. I do not want to get my withdrawal taxed and instead want to use the same account when I join another company and Yet to find next job. What are my options. Would I have to necessarily withdraw?
Thakur-You can continue once you restart job.
Hi Anand ,
I worked in my old organization for 6.5 years(2006 to 2013 June) and when I left the organization I opted for transfer of PF.But I did not transfer my account yet with my new employer(Both have RPF).
But now I have got a form 16A(a seperate one) from my old employer saying interest of Rs . 17000 has been earned on the PF(section 194a) and a TDS of 1700 (10%) is deducted.( I don’t know why this is deducted).
My question is when I prepare the IT returns now do I need to include the the interest earned (17000) in my total income?
If so do I need to pay any additional tax as per my tax slab(20%) or the TDS (10% which is already deducted) has already sufficed the tax requirements?
Thanks and Regards,
Ravi
Raviprakash-Regarding taxation of EPF please refer my earlier post “Taxation of Employee Provident Fund (EPF)“.
I have left a pvt company 2 years ago and had completed 10 years with the company. I had removed the entire sum of Recognised Provident fund on leaving the company. On leaving I had taken a new job. Would the sum contributed by my previous employer and the interest earned on these contributions is taxable ?
Mahendra-Please read point no.3.
I am getting Rs.1920 per month as pension after the age of 58 years from EPF. Kindly intimate the taxability of the amount received.
Chandra-This pension is taxable income for you.
I am 73 years old. can I invest in PPF for Tax benefits.
Waghmar-Yes you can invest. But do remember that PPF offers less liquidity. Being 73 years of old and if something urgency related to your health then you are unable to liquidate it. Otherwise you can go ahead.