Pf withdrawal before 5 years by an nri

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Swati (Querist)

22 February 2018 Hi

One of my friend is an NRI based. I have a question about Income Tax liability of EPF withdrawal from India before 5 years of employment. The facts are as follows:

1. Continuous employment in private companies in India between Jun-2011 to June -2015 (Total approx 4 years). For this period EPF was deducted by employers in India.

2. No employment in India since then and no other income is accrued.

3. Consolidated EPF was withdrawn in FY 2016 - 17 on which a TDS of 10% was deducted. This amount is reflect in Form 26AS for FY 2016 - 17.

My question is Can i claim the TDS deducted as refund while filling the return for FY 2016 - 17 ?. As the PF withdrawal is the only income for the year.

Regards
Swati

Arpit

Arpit (Expert)

22 February 2018 Interest earned by your friend on his/her own contribution to PF shall be taxed as “income from other sources”.

Aggregate of employer’s contribution to PF and interest earned thereon will be taxable as salary.

Payment received in respect of the your friend's own contribution is exempt from tax (to the extent not claimed as a deduction earlier). Otherwise, he/she needs to revise the previous filed tax returns in respect of which 80C deduction was claimed.

Whether or not your friend shall get tax refund will depend on above mentioned calculation

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