Is EPF amount is taxable ?

Tax queries 4188 views 4 replies

Is EPF amount is taxable ? I got my EPF amount settled from my last company but  the company's CA has deducted 33% tax including surchange at source on the EPF settlement amount.is this legal ?
Thanks
Josh

Replies (4)
Originally posted by :josh
"

Is EPF amount is taxable ? I got my EPF amount settled from my last company but  the compay's CA has deducted 33% tax including surchange at source on the EPF settlement amount.is this legal ?
Thanks
Josh

 

I think it is wrong.There is no provision for deducting TDS on EPF amount. but Not sure

"

No, Its not.

PF withdrawal is not taxable only if a person has been in continuos service for 5 years. In your case if you have had PF balance from your previous employer then such balance should have been transferred from your previous employer to your current employer and the period of service of both employers would need to be aggregated to check if you have completed 5 years of continuous service.

If employer’s contribution is upto 12% of salary and interest does not exceed notified rate of interest (At present 9.50% p.a.), it is not taxable.

However, the accumulated balance due and becoming payable to an employee participating in  Recognised Provident Fund (RPF) is taxable u/s.17 under the head Income from Salary to the extent of  Employers contribution and interest thereon, if  i) he does not serve for continuous period of 5 years with the said employer or ii) termination of service is due to reasons beyond his control or iii) in case of employment with other employer, balance in RPF is transferred to RPF account maintained by his other employer.

 


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