Tax on PF withdrawal

This query is : Resolved

CA Ankit Shah (Querist)
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23 July 2011 Dear Friends,

If someone work with X Co. for 3 years AND then with Y Co. for another 3 years.

Query regarding taxability on PF withdrawal:

1. PF balance with X ltd AND PF balance with Y LTd: (without PF account transfer from X LTd to Y ltd.): total PF account holding period exceed 5 years.

2. PF balance with X ltd transferred to Y ltd.: total PF account holding period exceed 5 years.

Now.

1. 1st option valid or compulsory to transfer PF to Y company?

2. whether in both cases total PF can be withdrawan?

3. Taxliability on PF withdrawal in both cases, same of different?

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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23 July 2011 PF balance has to be transferred to the new
company Y. After completion of 6 years,
3Yrs in X and 3 Years in Y, the entire balance can be withdrawn as the 5 years completion requirement fulfills.

If you withdraw separately from each account, without transferring the balance of X to Y then in both the cases it may be treated as prematured withdrawals and taxed accordingly.