Tax on eps withdrawl


Divakar Kasamsetty   12 May 2019

Divakar Kasamsetty

 25 points

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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

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Ashwin Kumar   12 May 2019

Ashwin Kumar

 67 likes  1178 points

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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

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Divakar Kasamsetty   13 May 2019

Divakar Kasamsetty

 25 points

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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


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