Tax on PF withdrawal

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2011 Dear Friends,

If someone work with X Co. for 2 years and 6 months AND then with Y Co. for another 2 years and 6 months.

Query regarding taxability on PF withdrawal:

1. PF balance with X ltd AND PF balance with Y LTd: (without PF account transfer from X LTd to Y ltd.): total PF account holding period exceed 4 years and 240 days.

2. PF balance with X ltd transferred to Y ltd.: total PF account holding period exceed 4 years and 240 days.

NOw.

1. 1st option valid or compulsory to transfer PF to Y company?

2. whether in both cases total PF can be withdrawan?

3. Taxliability on PF withdrawal in both cases, same of different?

Guest

Guest (Expert)

23 July 2011 1. For PF to be exempted from tax you have to make contribution for atleast 5 years.

2. Incase of change in organization, you to make transfer from organization X to Organization Y.

Thus to answer question

1. As per process it is mandatory to transfer pf when you are going shift from one company to another. But people tend to work around it saying that they will not be working any more and withdraw PF

2. Yes. By the above way

3. In both the case pf will be taxable, as 5 year has not be completed.

Note:

Above comments are from personal experience

My Background.

I am an ex banker and now a consultant. For further details on me you can visit buyerscredit.wordpress.com

Querist : Anonymous

Querist : Anonymous (Querist)

23 July 2011 Thanks friend for reply.....BUT....

i read somewhere that by recent judgement 4 years and 240 days instead of 5 years.

https://www.caclubindia.com/experts/income-tax-diducted-from-pf-withdrawan-710355.asp

can u please reply with considering that 4 years and 240 days, because by that answer will be different....

Querist : Anonymous

Querist : Anonymous (Querist)

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
Follow

25 July 2011 I agree with the expert

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now

Summarize this with AI

ChatGPT Perplexity Claude Google AI Grok

Similar Resolved Queries

Unanswered Queries

Popular
Recent

Trending Online Classes

Direct Tax Laws & International Taxation May 26,Sept 26 & Jan 27

CA Arvind Tuli

Enroll Now
Audit Fast Track Recorded Batch For May 26,Sept 26 & Jan 27

CA Aarti Lahoti

Enroll Now
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English

CA Bhanwar Borana & CA Shubham Keswani

Enroll Now

view all classess

Meet our CAclubindia PRO Members

Vidit Ratanghayra

CA Varun Gupta

Pawan Haryani

Naresh Dhawan

Tanishka Khandelwal

Subscribe Now

Tax on PF withdrawal

Similar Resolved Queries

Trending Online Classes

Meet our CAclubindia PRO Members

Quick Links

Browse by Category

Latest Job Openings

GST CONSULTANT

Article Assistant

Accountant

CA Final

GST CONSULTANCY

Manager- Finance and Compliance