Contribution towards an EPF account provides a benefit to
individuals by way of a deduction under Section 80 C. It would also be good to
know what would be the income tax implications of EPF withdrawal.
Interestingly, EPF withdrawal is taxable under certain circumstances and exempt
under the certain circumstances.
The following table will help
you easily understand the taxability on withdrawal of EPF:
|
Serial No
|
Scenario
|
Taxability
|
|
1
|
Amount withdrawn is
< Rs 50,000 before completion of 5 continuous years of service
|
No TDS.
However, If the
individual falls under the taxable bracket, he has to offer such EPF
withdrawal in his return of income
|
|
2
|
Amount withdrawn is > Rs 50,000 before completion of 5 years of
continuous service
|
TDS @ 10% if PAN is furnished;
No TDS in case Form
15G/15H is furnished
|
|
3
|
Withdrawal of EPF after 5 years of continuous service
|
No TDS.
Further, the individual
need not offer the same in the return of income as such withdrawal is exempt
from tax
|
|
4
|
Transfer of PF from one account to another upon a change of job
|
No TDS.
Further, the individual
need not offer the same in return of income as it is not taxable.
|
|
5
|
Before completion of 5 continuous years of service\ if
employment is
terminated due to employee’s ill health
The business of the
employer is discontinued
or the reasons for
withdrawal are beyond the employee’s control
|
No TDS.
Further, the individual
need not offer the same in the return of income as such withdrawal is exempt
from tax
|
