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PF WITHDRAWAL

08 May 2018

if I withdraw pf amount before 5 yrs of continous service , the tax benefit claimed from under 80c is taxable in year of withdrawal .....

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11 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 08 May 2018

Yes

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srilatha maduri (268 Points)
Replied 08 May 2018

the tax benefit claimed in the year of withdrawal or from the beginning from where we have started taking this 80c benefit .... which amt is taxable ???

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 08 May 2018

Tax on PF can be broken into three parts:

1. Total contribution by the employer plus interest (not taxed earlier) will be taxed under the head 'profits in lieu of salary'.

2. You will be taxed on the amount of tax benefit claimed for your contribution of EPF.

3. Interest received on your own contribution to EPF will be taxed as 'income from other sources'.

srilatha maduri (268 Points)
Replied 12 May 2018

if on that pf amount TDs have been deducted...then he need to include the pf withdrawn in gross salary and that withdrawn amount is taxable at normal slab rates ...even though TDs have been deducted

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 12 May 2018

Yes, Correct....

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srilatha maduri (268 Points)
Replied 13 May 2018

sir can u provide any example or
any section or provision stating the Same ....

or any other link

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 13 May 2018

1. tax-on-epf-withdrawal-new-tds-rule-flowchart

2. tax-treatment-provident-fund-epf

srilatha maduri (268 Points)
Replied 13 May 2018

now my question is .... already TDs have been deducted by the employer on the pf amount ....

and that is being depicted in 26AS....

I got a income tax notice stating that PF withdrawn should be shown under IFOS.

I have declared ....now it's showing me a tax liability of around 70000/-

my gross total income (including pf): 1500000(approx)

pf amt : 300000.
TDs 30000. @ 10%

even thought TDs have been deducted and paid by my employer....again i need to pay tax ....????

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177741 Points)
Replied 14 May 2018

That was your misunderstanding. TDS deducted is just intimation to department about your source of income, and is deducted at some fixed rate at 10% of the amount. While for different assessees it is taxed at his/her slab rate. You fall under 30% slab rate, so additional 20% (plus Cess) was payable by you.

Now the difference of tax liability alongwith interest for delayed payment arrives at around 70,000/- which is authentic. You are liable to pay it, without any excuse.

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