Is EPF taxable if going for study?

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

19 July 2010 Hi,
I need urgent help for filing tax return.
I was working in a company from july 2005 to march 2010. I left the company to go for higher studies. Although I left the company in march, I recieved my EPF withdrawl in july 2010.

(a) Is there any act or law under which EPF is not taxed if I am going for studies? I have used that money to pay for my studies

(b) I left the company in march, but recieved the PF amount after 5 years of joining (from july 2005- july 2010). Do I need to pay tax on that?

(c)Will this PF money be counted in Financial year 2009-2010 or 2010-2011?
I had applied for withdrawl in 2009-2010, but recieved in 2010-2011.

Thanks in advance.
Please help me in this. I am really confused.

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
Follow

19 July 2010 In any case, till now there is no tax on the withdrawal proceeds of EPF account.

The use of such proceeds is immaterial for this regard.

Message likes : 1 times

Querist : Anonymous

Querist : Anonymous (Querist)

19 July 2010 Dear Mr. Jha,
Thanks for the prompt reply.
I googled on this and found that I have to pay tax if the PF is withdrawn before 5 years.
Is EPF and PF different?

Upgrade to CAclubindia Pro. Subscribe Now!

Querist : Anonymous

Querist : Anonymous (Querist)

20 July 2010 Other posts on this site say that PF before 5 years should be taxed.
Could you please clear this confusion?

CMA. Subhash Kumar Jha

CMA. Subhash Kumar Jha (Expert)
Follow

20 July 2010 CORRECTION in MY above POST :

PF withdrawal is not taxable only if a person has been in continuous service for 5 years.

5 years will be considered as continuous service for 5 years & not the withdrawal after 5 years.

Even a person leaves a job in between but gets his pf amount transferred into the new pf account, then the duration of both jobs would be counted as continuous.

In your case... your service has not been for continuous 5 years so it will be taxable.