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PF TAX FILLING

manish_s (ap) (34 Points)

18 December 2021

IN LAST 5 YEARS I HAVE 2 JOB CHANGES AND TOTAL 3 JOBS FOR DURATION OF 20 MONTHS. AS OF NOW , I AM UNEMPLOYED AND HAVE JOB BREAKS OF MORE THAN ONE YEAR IN ALL JOBS. THIS 20 MONTHS ARE NOT CONTINUOUS. I HAVE PF ACCOUNT OF ALL EMPLOYERS . I HAVE NOT TRANSFERRED PF'S FROM ANY ACCOUNT. I AM EARNING INTEREST AND NOW I HAVE TO PAY TAX AS WELL AS I DON'T HAVE TOTAL EMPLOYMENT OF 5 YEARS.SO

1 SHOULD I WITHDRAW AND PAY TAX?

2. SHOULD I KEEP ACCUMULATING PF AND INTEREST AND JUST TRANSFER PF TO ONE ACCOUNT? I HAVE NO CLARITY ON WHEN I WILL START NEXT JOB? IF I DO THIS, I KEEP ACCUMULATING INTEREST AND PAY TAX LATER.

IS THERE ANY WAY I CAN WITHDRAW PF OR KEEP PF AND SAVE ON TAXES NOW OR LATER? PLEASE ADVICE . I AM CURRENTLY UNEMPLOYED?

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4 Replies

CA Aakarsh Jain (CA) (10431 Points)
Replied 18 December 2021

If you not withdraw your money then the interest received by you is taxable and whenever you withdraw money from your account then the amount is taxable too plus if the withdrawal amount is greater than rs. 50000 then tds will also be deducted @ 10%

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manish_s (ap) (34 Points)
Replied 18 December 2021

Thanks Aakarsh. However, I am aware of taxability. My question is about saving tax and whether I should withdraw now or later what is advisable.

CA Aakarsh Jain (CA) (10431 Points)
Replied 18 December 2021

To save tax you have to withdraw that amount that will not become taxable due to coming in lower income slabs.

Deeep ABKP (3 Points)
Replied 19 December 2021

In case you are unemployed and no further plans for job- Withdraw PF, TDS @ 10% will be deducted if pf amt. is more than 50000. TDS deducted can be claimed as refund in ITR for relevant assessment year. you can claim refund of entire TDS in case your total taxable income is 500000 or less.
interest will be declared as income from other sources and PF amount under the head salary income. All in all just ensure that your total income in the year of withdrawal is 500000 or less, If it is upto 250000 you can submit form 15G/H and no tds will be deducted.