PF withdrawal before 5 years

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CA FINAL STUDENT
96 Points Posted on 02 February 2020
Is there any way out from paying tax on PF withdrawal. one of my friend resign from Pvt. sector company and join Govt. job. He has no option to switch PF account. Only option to withdraw. Now company wants to deduct TDS. Plz give me any way out from tax
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On 02 February 2020 at 14:02 Report
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Quick Summary
This discussion explores options for avoiding tax on Provident Fund (PF) withdrawals made before completing five years of continuous service. The general advice is that withdrawals before five years are taxable. However, participants discuss whether retaining the PF amount with the previous employer or transferring it to a new employer can help defer or avoid tax. The consensus leans towards waiting until the five-year mark to withdraw tax-free, or transferring the funds if moving to a new job.

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59 Points Posted on 02 February 2020
Yes it is taxable if he withdraw before 5 years. so better leave the amount of PF with them or can be transferred to another company if he joins. Or if he is not willing to join new job, better to withdraw after completion of 5 years.
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On 02 February 2020 at 20:55
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CA FINAL STUDENT
96 Points Posted on 02 February 2020
Thanks for your response..... please consider...He has resigned from company before completion of five years. there is no option to transfer account. Now what is the way out to exempt from tax. Is it possible that 50% withdraw in one year and 50% in another year. Or any other way out... please suggest
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On 02 February 2020 at 20:58
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59 Points Posted on 02 February 2020
No he should wait for 5 years for withdrawl to save the tax. He can keep the amount with the company.
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On 02 February 2020 at 21:00
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CA FINAL STUDENT
96 Points Posted on 03 February 2020
Ok thank u sir..... R u sure that.... I have resigned before 5 years... but amount in PF retain for more than 5 years then No tax. To whom I have to request?
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On 03 February 2020 at 07:43

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