Income tax on withdrawal of PF

This query is : Resolved

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If you withdraw your Provident Fund (PF) after completing 20 years of continuous service, the entire amount, including your contributions, employer's contributions, and interest, is fully exempt from income tax. This exemption is granted under Section 10(12) of the Income Tax Act, 1961, provided you have completed at least 5 years of continuous service. Withdrawals made before 5 years are generally taxable unless specific conditions like termination due to reasons beyond your control or transfer to another recognised PF are met.

Srinivasa Joshi

Srinivasa Joshi (Querist)
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20 November 2025 Sir
Income tax on withdrawal of PF after 20 years of services, on which portion income tax has to pay.
please clarify the doubt sir.
Thanking you
Srinivasa Joshi

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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21 November 2025 If you withdraw your Provident Fund (PF/EPF) after completing 20 years of continuous service, the withdrawal is fully exempt from income tax. No portion—neither your contribution, employer’s contribution, nor the interest—is taxable because the exemption applies once you cross 5 years of continuous service.

Srinivasa Joshi

Srinivasa Joshi (Querist)
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22 November 2025 Thank you very much sir

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 November 2025 You are welcome.

Srinivasa Joshi

Srinivasa Joshi (Querist)
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22 November 2025 Sir
one of my friend is asking his director has withdrawn the PF after 35 years of services, employees, employers and interest amounting of rs. 1.50 cr. please suggest and guide sir any income tax attracts to the assesses. respected sir you are already suggested no tax but exempted under which section for more clarity.
please sir

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 November 2025 “As per Section 10(12) of the Income Tax Act, 1961 read with Rule 8 of Part A, Fourth Schedule, accumulated balances withdrawn from a Recognised Provident Fund after 5 years of continuous service are fully exempt from tax. Withdrawals before 5 years attract tax unless due to reasons beyond the employee’s control or if transferred to another employer’s RPF.”

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 November 2025 Read: 1. https://cleartax.in/s/pf-balance-withdrawal-incometax

2. https://www.axismaxlife.com/blog/personal-finance/pf-withdrawal-tax-implications

3. https://taxconcept.net/epfo/new-tax-rules-for-epf-withdrawals/

Srinivasa Joshi

Srinivasa Joshi (Querist)
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22 November 2025 Thank you very much respected sir

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)
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22 November 2025 You are welcome..

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