Question on Income Tax Computation for PF Withdrawl

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Noor

Software design engineer for test

25 Points Posted on 30 April 2011

Hi Income Tax experts,

I want to know about income tax liability on my PF withdrawl last year. My PF account is with EPFO,bangalore. I have withdrawn the PF amount after working for 3.5 years in a company. Is this withdrawl come under Section 10(12) of IT Act ?

I asking about this because of recent news that IT department asked EPFO to deduct the TDS for the premature PF withdrawls ? If EPFO which was setup by central government and the withdrawl from its PF account fall under Section 10(12) why would IT depart asks it to deduct TDS ?

Thanks for your help.

Replies (5)

U S Sharma

glidor@gmail.com

21068 Points Posted on 30 April 2011

PF accounts, where the contribution is not completed for 5 years can not enjoy the exemption, hence the whole the sum withdrawn will be subject to tax in year of withdrawl,

the amount would be added to your taxable income and would be taxed as per slab, TDS if any deducted by EPF would be available to set off your tax liability or refund., as the case may be

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AGREE WITH U S SHARMA

Noor

Software design engineer for test

25 Points Posted on 30 April 2011

Originally posted by : RADHEKRISHNA0001
	AGREE WITH U S SHARMA

In some other threads I am seeing that the tax liability is on only employers contribution and the interest amount. And there is no liability on employee contribution. Can you please clarify ? Thanks again for your time and suggestions.