EPF Withdrawal | Tax Calculation

Tax queries 146 views 4 replies

Vivek

XYZ

26 Points Joined February 2022

Hi all,

Can you please help me with the below query ?

Scenario:

Sep-2006 to May-2012 (Tenure-1) : Worked for company ABC in India - Contribution to EPF account (Say Amount1 to UAN1 ) - { Service period > 5years , Amount1 > 50K }
June-2012 to May-2014: Moved abroad for another assignment - Didnt withdraw any EPF amount (Account remained ASIS)
June-2014 to Dec.2017 (Tenure-2) - Resumed working for same company ABC in India - Contribution to NEW EPF account (Say Amount2 to UAN2 ) - { Service period < 5years , Amount2 > 50K }
Jan-2018 to Jan-2022 - Moved abroad for another assignment.

I had recently transferred the amount lying in UAN1 (Amount1) to UAN2 (Amount2), so all the contributions + interest is now in UAN2. I want to withdraw the full money (PF + Pension) via the Online Claim process .

Queries :

Is TDS applicable only on Amount2 that was collected in UAN2 or the entire amount ( Amount1 + Amount 2) ? - Please note that service was > 5 years for the first tenure.
Is it advisable to fill form 15G , if Amount2 itself even after deductions (80C etc.) will generate a tax liability ? - Trying to clarify as 15G should only be filled if estimated tax liability is to be NIL.

Replies (4)

Himanshu Singh

77 Points Joined July 2020

Since maturity amount is withdrawn after 5years of service whole amount stands exempt

Vivek

XYZ

26 Points Joined February 2022

Hi Himanshu,

Thanks for the revert. Just to understand here.

My 2nd tenure service was for less than 5 years. Still its exempt from Tax ?

I will be thankful if you could answer the 2 queries in the question (pasting again below) seperately so that everything becomes clear to me. Thanks again

Queries :

1. Is TDS applicable only on Amount2 that was collected in UAN2 or the entire amount ( Amount1 + Amount 2) ? - Please note that service was > 5 years for the first tenure.

2. Is it advisable to fill form 15G , if Amount2 itself even after deductions (80C etc.) will generate a tax liability ? - Trying to clarify as 15G should only be filled if estimated tax liability is to be NIL.

Himanshu Singh

77 Points Joined July 2020

1. The period of service is calculated on cumulative basis therefore overall you have served more than 5 years, entire amount is exempt and no TDS provision shall apply

2. Since you have served for more than 5years TDS
provision won't be applicable in your case but there are many cases when you can't make it understand to the deductor. So in case TDS is deducted that amount can be claimed for refund while filling you ITR
I would advise not to file form 15G since you have tax liability other than considering EPF withdrawal

Rest I would request other professional buddies to contribute their view

Vivek

XYZ

26 Points Joined February 2022

Thanks for the reply again Himanshu :

1. The period of service is calculated on cumulative basis therefore overall you have served more than 5 years, entire amount is exempt and no TDS provision shall apply - [ Vivek : The cumulative basis is for 'continuous' service or applies even if there is break (as is applicable in my case) ]

2. I would advise not to file form 15G since you have tax liability other than considering EPF withdrawal [ Vivek : I have no tax liability other than the EPF withdrawal. What i mean in my comments earlier is that the EPF amount from my 2nd tenure (where service < 5 years) is large enough to generate a tax liability if we dont consider as exempted while per your understanding the entire amount should be exempted. ]