Hi,
One of the employees wants to withdraw the PF amount. He has rendered services for less than 5 years.
Is the PF amount withdrawn taxable ?
Thanks in advance
Vidisha
Vidisha Jain (CA FINAL) (155 Points)
22 January 2010Hi,
One of the employees wants to withdraw the PF amount. He has rendered services for less than 5 years.
Is the PF amount withdrawn taxable ?
Thanks in advance
Vidisha
ajay lohiya
(article)
(69 Points)
Replied 22 January 2010
withdrawl of PF is not taxable in the following situation:
1.on the death of employee,
2.on permanent disability of employee,
3. in case of non continus of business of employer,
4. on compleation of 5 years service
in given case amount is fully taxable . if it was received under aforesaid cases
CA. RUPESH JOSHI
(Chartered Accountant)
(174 Points)
Replied 22 January 2010
Ajay
In the instant case PF withdrawal is taxable only to the extent of employer's contribution and interest thereupon.
Employee's own contribution is not taxable
Hareesh H Sharma
(Cleared IPCC..now article)
(894 Points)
Replied 22 January 2010
Then what abt the interest on employee's contribution Rupesh sir
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 23 January 2010
In which section it is stated .please clarify .
Sorabh Gupta
(Manager ( Taxation ))
(877 Points)
Replied 23 January 2010
Dear Sivaraman
Hope this will clear your doubts.......
(12) the accumulated balance due and becoming payable to an employee participating in a recognised provident fund, to the extent provided in rule 8 of Part A of the Fourth Schedule ;
(i) if he has rendered continuous service with his employer for a period of five years or more, or(ii) if, though he has not rendered such continuous service, the service has been terminated by reason of the employees ill-health, or by the contraction or discontinuance of the employers business or other cause beyond the control of the employee, or(iii) if, on the cessation of his employment, the employee obtains employment with any other employer, to the extent the accumulated balance due and becoming payable to him is transferred to his individual account in any recognised provident fund maintained by such other employer.
sivaram
(Asst Mgr-Taxation)
(6918 Points)
Replied 23 January 2010
Thanks Mr Sorabh Gupta For giving Your Reply in this regard
manish
(Article Assitant)
(358 Points)
Replied 23 January 2010
Yes PF is taxable in that time but only the amount not taxed previously shall become taxable. (for RPF & URPF)
Nothing shall be taxable if: 1. Employee left the job after atleast 5 years of service or, 2. Due to ill health, discontinuance of employer's business or reasons beyond his control or, 3. the balance is transfered to RPF with new employer, in such case for computing the period of 5 years under the new employer, the period of service rendered under the previous employer shall be included. Nothing Shall be taxable in SPF.
sravani
(ase)
(21 Points)
Replied 03 August 2010
Hi,
Thank you all for providing wonderful information.
Can somebody clarify me the following -
My period of service is less than 5 years, i fall short of 2.5 months. I am going for my Phd which will be for 5 years, and hence there is no possibility for me to transfer the account to a new employer. But now that tax will be deducted on my pf, which is maintained as an RPF, is it possible that, I create a new ppf account with the govt and transfer the amount there. If yes, Will this get tax exemption later when I withdraw ?
Also, how much tax will be deducted ? Can anybody explain?
CA Vijay Jain
(Chartered Accountant)
(176 Points)
Replied 03 August 2010
That the amount & intrest withdrawn of employer's contribution is not taxable in undermentioned cases
1. on death of employee.
2. on permanent deseases
However, the amount of employee's contribution will be exempt but interest is taxable under other sources
Shantnu
(Senior Software Engineer)
(22 Points)
Replied 30 April 2012
Hi, If I want to withdraw my PF funds after completion of 5 years. But have a gap of 1 month in my service as I did no job for 1 month due to some personal reasons. Then will PF amount be taxed?
Mayur Jain
(IPCC student)
(42 Points)
Replied 01 May 2012
IN CASE OF SPF,,WITHDRAWL OF PF IS NOT TAXABLE...HOWEVER IN CASE OF RPF(IF WITHDRAWN BEFORE 5 YEARS) AND URPF(WITHDRAWN ANYTIME) .....WHOLE AMOUNT IS TAXABLE
Shantnu
(Senior Software Engineer)
(22 Points)
Replied 09 May 2012
Hi,
If I want to withdraw my PF funds after completion of 5 years. But have a gap of 1 month in my service as I did no job for 1 month due to some personal reasons. Then will PF amount be taxed?
If yes than what if I withdraw PF after 5 years of continuous service after the gap in service will my PF be still taxable?
CHIRAG PATEL
(Article Assistant)
(21 Points)
Replied 09 July 2012
Hi....Can we take benefit of sec. 10E in case of PF withdrawal.....? TDS has been deducted from withdrawal amount...can i claim that withdrawal amount u/s. 10E and get that TDS back as refund......? Plz guide me....
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