EPF Withdrawal: You will have to pay this much tax on withdrawing money from PF account, working professionals must know this

Now is a very important time for salaried professionals to calculate the tax on their salary and file their income tax return on time. Now, the tax on the salary will be there, but when you are filing your income tax return (ITR) (EPF Withdrawal)

So you will have to show the income from other sources as well, and your other income may also be taxable. In such a situation, you will also have to keep in mind whether you have to pay tax on the income you have received from any source, and which income comes under the purview of tax.

Do you pay tax on PF withdrawal?

Now let's talk about EPFO's Employee Provident Fund. Salaried employees have to deposit PF money from their salary, and along with the employee's contribution, your money keeps getting invested in this government scheme.

You can withdraw money from it after maturity, but you have the option to withdraw money from your PF account even earlier, but you should know whether you have to pay tax on EPF Withdrawal or not.

Withdrew money before 5 years

If you withdraw money from your PF account before completing five years of contribution, then you have to pay TDS on it. For this, you must be in service for 5 continuous years

In this, your tenure with both the new and old employers is counted. If you transfer your EPF balance from the old employer to the new employer after completion of five years or more, then TDS is not deducted on your funds.

The job has been temporary in these five years

If you have been working on contract for five years, then your PF will not be deposited, your employer does not have to contribute to your PF. But let's assume that after some time you become permanent in the job.

And your PF starts getting deducted. You leave this job after completing 5 years. And now if you want to transfer your EPF balance somewhere else, then it will be taxed because, out of the five years you have completed, you have spent some part of it in a temporary position.

Your funds have not been approved

A Provident Fund that has not received approval from the Commissioner of Income Tax is considered ineligible for tax exemption. It may have received approval from the Provident Fund or any other institution,

But you need approval from the Income Tax Commissioner to get exemption on withdrawal after 5 years. If you are a member of URPF, your withdrawal is taxable, whether you have completed five years or not.

Understand it like this-

-If you withdraw less than Rs 50,000 before completing 5 years of continuous service

TDS will not be deducted, but if the person falls in the taxable bracket, he will have to show the EPF withdrawal in his return of income.

-If you withdraw more than Rs 50,000 before completing 5 continuous years in service

10% TDS will be deducted on providing PAN. That too will not be deducted on submitting Form 15G/15H.

If you withdraw from EPF after completing five years

TDS will not be deducted. He will not even have to show this withdrawal in his return of income.

-If you want to transfer PF money from one account to another on changing jobs

TDS will not be deducted. It does not have to be shown in the return of income, because it is not taxable.

-If you have to leave the job for any reason before completing five years in service/the reason for withdrawal is beyond your control

TDS will not be deducted. It does not have to be shown in the return of income, because it is not taxable .