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: TAX RATES - GOODS TAXABLE @ 4% :: form 3cd :: ACCOUNTING STANDARDS :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ACCOUNTING STANDARD :: empanelment :: TDS :: articles on VAT and GST in India :: list of goods taxed at 4% :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: VAT RATES :: due date for vat payment :: Central Excise rule to resale the machines to a new company :: cpt :: VAT Audit
 
 
General »
 Simplified one page Income Tax Return Form: Changes to keep in mind before filing tax return for AY2017-18
  No proposal to replace Income Tax with Banking Cash Transaction Tax
 GST coming July 1 despite calls for delay: Revenue Secretary Hasmukh Adhia
 Centre introduces provision of taxation on NPS in Income Tax Act
 Income Tax Department Clarifies On Cash Withdrawal From Banks, Post Offices
 The Goods And Services Tax (Compensation To States) Bill, 2017
  Goods and Service Tax (GST) and Real Estate Sector
 New Income Tax Rules On Home Loan Come Into Effect
 Here's how late filers can save on stress and taxes
 Clarifications on the Taxation and Investment Regime for Pradhan Mantri Garib ?Kalyan Yojana, 2016
 Companies should invest in upgradation of tax technology

Tax on PF withdrawal if service is lesser than 5 continuous years
January, 21st 2016

You can withdraw the PF balance only once you cease employment and you need to have a non-employment period of two months after leaving your job. You would be required to fill up the specified form through your employer.

The cumulative PF balance withdrawn from a recognised PF triggers tax liability, if an employee does not render continuous services for a period of at least five years to the employer. While determining the period of continuous service of five years, the period of service rendered to the previous employer(s) should also be added if the cumulative PF balance maintained with the old employer has been transferred to the PF account of the new or current employer.

We have assumed that either your current job is your first job or you have not transferred your PF balance that was with your earlier employers (if any), to the PF account of the current employer.

As the total period of service is less than five years (only four years), tax may be levied on the accumulated PF balance withdrawn in the financial year of withdrawal.

The aggregate of the employer’s contribution to PF and interest earned thereon is taxable as salary. Further, the deduction claimed by you under section 80C of the income-tax Act on your own contribution to the recognised PF shall be taxed as ‘Salary’. The interest earned on your own contribution to PF shall be taxed as ‘Income from other sources’. The tax rate would depend upon your applicable income tax slab in each of the financial years during which the PF contributions were made. Surcharge (as applicable) and education cess shall be applicable for each of the financial years, and will also be payable in addition to the basic income tax. You can avail relief under section 89.

However, if you transfer the accumulated PF balance maintained with the current company to the PF account maintained with new employer and later on withdraw the accumulated PF balance maintained with the new company as per the provisions of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952, while computing the period of continuous service with the current employer then, the period of service rendered with the previous company will be included. Accordingly, where the cumulative years of service with the previous and new employers are more than five years, PF withdrawal may not trigger any tax liability.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 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