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Tax on eps withdrawl

Tax queries 201 views 2 replies

Divakar Kasamsetty

30 Points Posted on 12 May 2019

Respected Sir / Madam,

I have worked in Company A for 3 years and took 2 months break and joined company B. I worked in Company B for 3 years and now i have resigned and not joined any company for the past 3 months. I have also transferred my PF account from Company A to Company B. Kindly clarify the below query ?

1. If i withdraw EPS now, is it taxable ?

2. I read in one article EPS is taxable if the continuous service is less than 5 years, here continuous means no break towards EPS contribution for 5 years ??

Appreciate your inputs in this regard.

Thanks,

Divakar

Replies (2)

Ashwin Kumar

1234 Points Posted on 12 May 2019

continuous service varies in three ways...companies working 6 days, less than 6 days and 75% of working days in case of seasonal establishment....you had satisfied the required condition of continuos service then your withdrawal is not taxable..if not then taxable..in your case eventhough you took 2 months break if you had worked for 240 days (assuming your company runs 6 days in a week) then your withdrawal is exempted to the limit as prescribed by relevant act...if not the whole amount is taxable

Divakar Kasamsetty

30 Points Posted on 13 May 2019

Thank you sir for your explanation, Is it possible to share the reference link from income tax act ? would like to go through it for my better understanding