Hi,
I have worked with a company for 2 years and leaving it now. And I have not decided when I will join next company. Please advise whether I should withdraw PF? Under which section it will be taxable and what is rate?
Thanks,
Smita
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Pf withdrawal
Replies (2)
Summarized table showing tax treatment of provident funds
| Fund | During Continuity of Job | Upon Retiremen | ||
| Employee’s Contribution | Employer’s Contribution | Interest on Provident Fund | Repayment of sum on retirement, resignation or termination | |
| RPF | Deduction under Section 80C is available. | Exempt upto 12% of Salary. Thus Contribution made by employer exceeding 12% shall be added to employee’s salary Income. | Exempt upto 9.5%. Interest exceeding 9.5% shall be added to employee’s Salary Income. |
Nothing is taxable subject to following conditions:
If none of the above conditions are satisfied then:
|
| URPF | No deduction under section 80C available | Any amount of contribution is not taxable | Not taxable |
Sum received on retirement/ termination comprise of following:Employer’s Contribution and interest there on: Taxable as Salary Income. Employee’s own Contribution : It is not taxable. Interest on employee’s contribution: Taxable as income from other sources. |
| SPF | Deduction under Section 80C is available. | Fully Exempt | Fully Exempt | Fully Exempt |
| PPF | Assessee / Employee can make contribution to PPF, No concept of Employer’s Contribution. Deduction under section 80C available on contribution made. | Amount received (including interest) is Fully Exempt. | ||
The tax treatment of interest on Provident Fund is as follows
Recognized Provident Fund:Interest on provident fund is exempt up to 8.25%. Interest exceeding 8.25% will be added to employee’s salary income
Unrecognized Provident Fund: Not Taxable
Statutory Provident Fund: Fully Exempt
PPF: Fully exempt
Hi
Personal advice no need to withdraw PF amount if you have financial crunches, PF is saving for easy retirement & pension plan which most of people doesnt know, more over employer contri. is 100% tax free.
Thanks//Vaibhav
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