Tax on EPF/EPS Withdrawal

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This discussion clarifies the taxability of EPF/EPS withdrawals. Generally, if you have completed 5 or more years of continuous service, your EPF withdrawal is tax-exempt. If the service period is less than 5 years, the withdrawn amount may be taxable, and TDS might be deducted in such cases. The user confirmed their service was over 5 years, making their withdrawal tax-exempt.

Guest

Guest (Querist)

25 June 2024 I was in service in private company for ~8 years.
I resigned and was unemployed for 2 months.
That made me eligible to withdraw EPF/EPS. (My age < 45)

I used Form 10C and Form 19 to withdraw all the amount. I think one of the form was for EPF and other for EPS(?).

Is any of the amount that I withdrew taxable? Or is everything tax exempt?
There was no TDS deduction on withdrawal.

Gokul Sharma

Gokul Sharma (Expert)

26 June 2024 premature withdrawal is taxable.

Guest

Guest (Querist)

26 June 2024 Thank you for the response.
Is there any link where I can read up on how much tax needs to be paid?
I'm getting conflicting details online. Most websites mention that if period of service is 5+ years, then it is tax exempt.

Guest

Guest (Querist)

26 June 2024 One such example from source:
https://economictimes.indiatimes.com/wealth/tax/when-does-epf-become-taxable/articleshow/82760886.cms

"Full withdrawal from the EPF account is allowed if an employee has left his/her job and has not joined any other new job after two months. In such a scenario, taxation of the withdrawal from EPF account will depend on the how long the EPF account has been active."

"Raote says, 'If the withdrawal from EPF account is made after working for 5 continuous years, then such withdrawal is exempted from tax. On the other hand, if the continuous service is less than five years, then the amount withdrawn becomes taxable...'"

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

26 June 2024 Yes, you are right you resigned after 5 years of service your withdrawal is exempt from tax.
In case it's taxable TDS might have been deducted.

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