Tax on EPF Amount

The basic idea of EPF is that it’s a debt based saving scheme with the objective of saving for the retirement powered by the government which provides an attractive rate of interest and the privilege of tax exemption as well. Though there are certain scenarios in which the withdrawn EPF amount is taxable.
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These scenarios are arising more so in today’s dynamics as the trend of working with the same employer for a long duration is fading fast. Thus, in case of job change employee is required to transfer EPF account to the new employer which again is tax-free. However, there can be a situation where the new organization does not come under the PF Act. So to tackle such different situations it is being stated that to withdraw from EPF account minimum of 5 years of continuous service is required not necessarily with the same employer and in case the withdrawal is made of more than Rs. 50,000 before 5 years than 10% TDS will be deducted.

This deduction will be exempt if the individual furnishes Form15G/15H which proves that tax calculated on individual’s income is nil and total interest for that year is less than the exemption limit.

 Additional Reading:- Is Your EPF Amount Taxable

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