1. Amount withdrawn is less than Rs.50,000 before completion of five continuous years of service - No TDS. (However, If the individual is exempted from tax, he has to provide such EPF withdrawal in his income tax return.
2. Amount withdrawn is greater than Rs.50,000 before completion of five years of continuous service -TDS @ 10 percent if PAN is furnished. (No TDS just in case form 15H/15G is well-furnished.)
3. PF Withdrawal after 5 years of continuous service - No TDS (Tax Deducted at Source). Further, the individual need to provide an equivalent within the income tax return as a withdrawal is exempt from tax.
4. Transfer of PF from one account to a different upon a job change - No TDS. (Further, the individual needn't provide an equivalent as it is non-taxable under income tax return.
5. Before completion of five continuous years of service, in-case (1) employment is terminated because of employee’s health concerns. (2) The business is discontinued by employer (3) reason for withdrawal are beyond the control of employee – then in that case there is No TDS. (Further, the individual needn't provide an evidence in ITR (Income Tax Return) as intrinsically such withdrawal are exempted from tax.
New EPF Withdrawal Rules Amendment From 2018-2019:
The Employees Provident Fund Organization (EPFO) made a change to the EPF withdrawal rule in the year 2018. The EPF account comprises of commitments from the employee and employer. Be that as it may, the cash in an EPF account can't be withdrawn back at impulse.
1. Cash from the EPF account can't be withdrawn back during employment period, dissimilar to a financial bank account. EPF is a long term retirement investment corpus funds. The cash can be withdrawn back simply after retirement.
2. Fractional withdrawal from EPF accounts is allowed on account of a crisis, for example, medical emergencies, constructing or buying house, and for higher education. Partial withdrawal is liable to limits contingent upon the reason.
3. In spite of the fact that the EPF corpus can be withdrawn back simply after retirement, early retirement isn't considered until the point that the individual is of 55 years old. EPFO permits withdrawal of 90% of the EPF corpus 1 year before retirement, given the condition that the individual isn't under 54 years of age.
4. EPF corpus withdrawal is exempted from assessment however under specific conditions. EPF corpus amount is tax exempted, just if an employee contribute to the EPF representing 5 years of continuous service. The EPF amount is considered to be taxable, if there is a break in the commitment to the record for 5 constant years. All things considered, the total EPF corpus amount will be considered as taxable salary in income tax return for that respective financial year.
5. According to the new rule and principle, EPFO permits withdrawal of 75% of the EPF corpus following a month of joblessness. The staying 25% can be exchanged to another EPF account in the wake of increasing new employment.
This post was modified 6 months ago 4 times by Sagar Shah