Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: due date for vat payment :: form 3cd :: ACCOUNTING STANDARD :: VAT RATES :: articles on VAT and GST in India :: VAT Audit :: Central Excise rule to resale the machines to a new company :: TAX RATES - GOODS TAXABLE @ 4% :: TDS :: ACCOUNTING STANDARDS :: cpt :: list of goods taxed at 4%
 
 
General »
 Don’t rush into a new tax without being prepared
 Can’t tax income from palace rent: Supreme Court
  Withdrawal of Legal Tender Character of the existing Bank Notes in the denominations of ₹ 500/- and ₹ 1000/- (Updated as on November 30, 2016)
 Cases for tax scrutiny will be selected by machines
 Time to revisit 1997 direct tax rates, says P Chidambaram
 Lok Sabha passes Bill to tax black money deposits post demonetisation
 Last day to pay property tax with old notes
 Income tax department asks IDS declarants to pay tax by 30 November
 Why PM Narendra Modi must beware of the breathtaking Arthakranti tax
 Japanese firms seek easing of restrictions on funding in India
 Tax on black money: How the cookie will crumble

Tax on PF withdrawal is based on income slab in respective years
November, 05th 2015

I have read that if the provident fund (PF) subscription is less than five years, then the amount, even if it is withdrawn after five years from its start, is taxable. If I were to get a job in a company where PF is not deducted for those above the threshold limit specified by the provident fund Act, when can it be withdrawn without being taxed?

An individual has to pay tax on the PF withdrawal if the same has been withdrawn from a recognized PF account without rendering continuous services for five years or more with the employer.

Furthermore, upon change in the employing entity, if the accumulated PF balance is transferred to the new PF account of another employer, then the period of previous employment should also be considered as part of continuous service and then, accordingly, the period of five years will be computed.

If an individual has rendered services, including services rendered with the previous employer, for more than five years and the accumulated PF balance from the previous employer has been transferred to the new PF account of the new employer, withdrawal may not be taxed.

In your case, on the assumption that PF may not be deducted by the new employer, and hence the PF account may not be transferred to the new employer, the services rendered with the new employer cannot be considered for computing the period of five years. Accordingly, withdrawal shall be taxable in the year of receipt. Continuing to keep the PF balance and withdrawing after five years of its start will not change the taxability.

If you withdraw, the total of employer’s contribution plus interest thereon as well as the benefit claimed under section 80C of the income tax Act on account of your contribution to the recognized PF shall be taxed as salary. Also, the interest on your own contribution shall be taxed under the head “Income from other sources”.

The tax rate would depend upon your applicable income slab in each of the financial years during which the PF contributions were made.

Separately, just for your information, as per a PF circular, a PF account becomes inoperative if there are no credits or contributions in the account for 36 months and accordingly, interest will not be credited in the said account after that period.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Multimedia Presentations Multimedia Solutions 3D Solutions Corporate Presentations Business Presentations Multimedia Presentation India M

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions