Master TDS & TCS Provisions with Critical Issues. Register Now!

PF withdrawal tax

Saurabh (16 Points)

10 May 2007

I changed my job in the month of July 2005 from a PSU where i as working for over 10 years. I received gratuity as terminal benefit . I also withdrew my entire PF balance with the employer, on leaving thejob. I joined another job where my PF is being deducted regularly. Thus for FY2006 i will have my Form 16 from two employers.

Please let me know

whether gratuity is exempt from tax

whether PF withdrawal is taxable.

thanks and regards

Reply
Follow
Share

4 Replies

krunal_love (25 Points)
Replied 18 May 2007

Gratuity exemption is available at the termination of your job. Hence you will be allowed Gratuity exemption as per the provision of I.T.Act. When next time you will ask for gratuity exemption ,it will be reduced prop'tly.

Upgrade to CAclubindia Pro. Subscribe Now!

Vk Duggal (320 Points)
Replied 18 May 2007

Withdrawl from Provident Fund will be exempt as it is withdrawn after five years of service. The provident fund should be recognised. Please refer Rule 8 of Schedule IV of Income-tax Act. Payment of Gratuity will be exempt to the extent provided in The Act.

bnnarayana (B.Com) (16 Points)
Replied 22 May 2007

GRATUITY IS NOT TAXABLE IF THE AMOUNT IS LESS THAN RS.350,000/- IF THE AMOUNT EXCEEDS THIS AMOUNT THAN THE BALANCE AMOUNT IS TAXABLE. PF WITHDRAWN IS NOT TAXABLE