Hi,
I have worked with a company for 3 1/2 years. If I withdraw my PF, will the tax be deducted on it or I will get the full amount.
23 Replies
Neha
(Article)
(118 Points)
Replied 19 May 2010
Dear Shyam ji....
No tax vl be deducted...u vl get full amount..but wen u vl file ur income tax return..u vl have to show that withdrawal as ur income n pay tax on it....
Ragrds.
Neha
DT Fundas - Tarun rustagi
( Author)
(1150 Points)
Replied 19 May 2010
no tax will be duducted on pf withdrawal.but u will have to pay income tax on this withdrawal as the withdrawal occurs before continous service of 5 years. dear sir if are not in urgent need of money then it is better for u to withdraw the amount after 5 years as it will not taxable at that time.
$wap$
(Assistant Auditor)
(189 Points)
Replied 20 May 2010
agree with tarun..
PF amount can be transferred to the new employer's PF account to escape tax liability
PRAVEEN KUMAR
(MBA (Finance) B.Com.(P))
(3443 Points)
Replied 20 May 2010
both suggession are good... by tarun rustagi &
"""no tax will be duducted on pf withdrawal.but u will have to pay income tax on this withdrawal as the withdrawal occurs before continous service of 5 years. dear sir if are not in urgent need of money then it is better for u to withdraw the amount after 5 years as it will not taxable at that time. """
""PF amount can be transferred to the new employer's PF account to escape tax liability"""
Rachit
(Analyst)
(913 Points)
Replied 20 May 2010
| Originally posted by : Neha Babbar | ||
 |
Dear Shyam ji.... No tax vl be deducted...u vl get full amount..but wen u vl file ur income tax return..u vl have to show that withdrawal as ur income n pay tax on it.... Ragrds. Neha |
 |
TDS will be deducted. Refer Rule 10 of Part A of the Fourth Schedule of the Income Tax Act, 1961
sm
(mgr)
(34 Points)
Replied 26 February 2011
Hi All
A nice discussion but I am still very confused :-
1) Is TDS applied on premature withdrawal of PF amount before 5 years or everytime you withdraw regardless of the number or years ?
2) Do we have to show the PF withdrawal while filing return - is income tax applicable on this amount
3) If TDS is already applied at the time of withdrawing - then repeat income tax will not be applied ?
4) Will TDS or income tax be applied even if you are resigining from current employer and moving abroad for another employment ?
Please kindly help to clarifiy
Thanks & Regards
Pankaj Arora
(Learner)
(3134 Points)
Replied 26 February 2011
If you don’t do job with any organization for 5 years than PF office will deduct your tds @ 30 % and at the time of filing return you can adjust tds deducted with your tax liability.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 26 February 2011
| Originally posted by : sm | ||
|
|
Hi All A nice discussion but I am still very confused :- 1) Is TDS applied on premature withdrawal of PF amount before 5 years or everytime you withdraw regardless of the number or years ? 2) Do we have to show the PF withdrawal while filing return - is income tax applicable on this amount 3) If TDS is already applied at the time of withdrawing - then repeat income tax will not be applied ? 4) Will TDS or income tax be applied even if you are resigining from current employer and moving abroad for another employment ? Please kindly help to clarifiy Thanks & Regards |
|
1) TDS - TDS is applicable if you opt to withdraw the entire sum in PF balance before expiery of 5 years from end of the Assessment year . Here if your income pattern is not in taxable limit then no TDS applicable, but you have to file return of the year of receipt and show the sum as taxable income.
in case you have completed 5 years with either one or with more employers than no TDS applicable.
2) yes , employee has to show the amount received from PF in their return, if its under 5 years then taxable, but if more than 5 years than exempted.
3) TDS is tax deducted at source, and adjustable with tax liability at the time of filing of return, (refundable in case of excess)
4) if moving abroad, then also its better to keep the sum with PF, and resume the account with another employer on return to india. Tax deduction is not concerned with your moving aborad, but the limit is 5 years of employment, if its below then TDS applicable.
sm
(mgr)
(34 Points)
Replied 28 February 2011
Dear All
Thank you so much for your kind advices - appreciate it very much.
I am told that if you are moving overseas for another employment you can avoid TDS on PF withdrawal before 5 years of continuous service if you submit your visa and new offer letter .
Is that true ??
Also as per the new rule passed in November last year - no interest can be earned on a dormant PF account - so makes sense to withdraw and put in MFs to recoved the TDS or file a return and get a refund if you have zero tax liability in India .
Look forward to your kind advice
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 28 February 2011
if u withdraw and TDS is deducted even , u can claim back by filing return, so no real loss
R.umamaheswari
(Manager(Finance))
(21 Points)
Replied 25 August 2011
i have withdrawn my PF from my last org. a TDS of 30% was deducted from it. Can I claim refund on the same from IT dept. when:
1: my taxable income is less than 1.6 lakhs for the year
2: it is in the 10% tax slab
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 25 August 2011
get TDS certificate and file the return, you will get refund after adjusting the tax liability.
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