Pf amount taxable
This query is : Resolved
28 April 2015
Pf Amount is consider for Tax ? both employee & Employer contribution is consider for the Tax ,
Under which section it will come?
Under which section it will come?
CA R SEETHARAMAN
(Expert)
28 April 2015
PF payment both employee and employer contribution exempted from tax if payment received after 5 years.
Withdrawal from Provident Fund (PF) Account before Completion of Five years taxable?
Withdrawal of Provident Fund may attract Income Tax. The Income Tax Department recently told EPFO (Employees Provident Fund Organisation) to deduct Tax (TDS) from the withdrawal amount, if the withdrawal happened before completing five years of subscription. Tax officials have cited a rule in the 1961 Income-Tax Act that taxes PF withdrawals by employees before completing five years of contributions into the EPF is taxable. -
Withdrawal from Provident Fund (PF) Account before Completion of Five years taxable?
Withdrawal of Provident Fund may attract Income Tax. The Income Tax Department recently told EPFO (Employees Provident Fund Organisation) to deduct Tax (TDS) from the withdrawal amount, if the withdrawal happened before completing five years of subscription. Tax officials have cited a rule in the 1961 Income-Tax Act that taxes PF withdrawals by employees before completing five years of contributions into the EPF is taxable. -
10 August 2024
Taxability on Withdrawal
Tax on Withdrawal Before 5 Years:
If the employee withdraws the PF amount before completing 5 years of continuous service, the entire amount (including employer’s contribution and interest) becomes taxable under Section 10(12). The employee will be taxed on this amount as per the applicable tax slab rates.
Tax on Withdrawal After 5 Years:
Tax-Free: If the employee withdraws the PF amount after completing 5 years of continuous service, it is generally tax-free under Section 10(12).
Tax on Withdrawal Before 5 Years:
If the employee withdraws the PF amount before completing 5 years of continuous service, the entire amount (including employer’s contribution and interest) becomes taxable under Section 10(12). The employee will be taxed on this amount as per the applicable tax slab rates.
Tax on Withdrawal After 5 Years:
Tax-Free: If the employee withdraws the PF amount after completing 5 years of continuous service, it is generally tax-free under Section 10(12).
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