Tax Implication for withdrawl PF

What is the tax implication for withdrawl before super annuation /retirement for PF accumulations .

In the following case the Employee started his career in 1995 and changed 4 companies . He wants to start his own venture thus want to resign from his current company in May ,11 .

So far he has transferred the PF accumulations to his new company whenever he joins i.e the current company is having the entire accumulations from 1995 being transferred to them by the previous employer's . This is under a trust managed the company .

	Company	From	To	Transfer from Previous Employer ( Employer + Employee + Interest)	Employer Cont	Employee Cont	Remarks

First Company	A	1995- Feb	2001- Jan		135000	140000	Transferred to Company B

	B	2001-Feb	2006-Feb	275000	230000	275000	Transferred to Company C

	C	2006 -Mar	2007-Mar	780000	125000	130000	Transferred to Company D

	D	2007 Apr	2011 May	1035000	465000	500000


			Accumulated Balance in Company - D			2000000

ANSWER

Rule 8(iii) of schedule IV read with explanation stipulates that even when the employee is not in continuous service with one employer for 5 years, but transfers his accumulated balance in recognised PF in the earlier organisation to his next organisation' recognised PF and so on, if he completes overall 5 years (taking all the employments together), then the accumulated balance will be non-taxable.