Is EPF Withdrawal Taxable?
For every employee tax on EPF is one of the major concerns. Many believe EPF withdrawal are not taxable, but that cannot be considered true completely. Withdrawal from EPF can be  very much taxable. Infact, TDS is also deducted in some cases. Let’s take a close look at the details.
If an employee withdraws the EPF balance before completing 5 yrs in professional service, then EPF balance is taxable.
In order to calculating the period of 5 yrs of service, it is not compulsory that service should be continued with the same employer all throughout the five years. He may have worked in different organisations in different roles. But as and when a person switches the job, he must get the PF balance transferred from previous employer’s account to the new company PF Account.
Cases when TDS is deducted on EPF withdrawal
TDS on EPF will be deducted, in case withdrawal is greater than Rs 50,000. This is applicable from June 2016. Previously this limit was Rs 30,000.
Rate of TDS – TDS will be deducted at 10% provided the employee has submitted his/her PAN. Otherwise TDS is deducted at the rate of 34.608% if PAN is not submitted.
However there are certain EXCEPTIONS to the deduction of TDS on EPF by EPF organisation.
- TDS is deducted in case of transfer of PF amount from one account to another PF account
- Also, no tax is deducted if employee withdraws the PF after completing 5 yrs of period of service.
- TDS is not deducted, where Form 15G or Form 15H are submitted by the employee to its current employer. The purpose of these forms are to declare that the income of these people would not be taxable after receiving the payment of accumulated PF balance. Senior citizens (above 60yrs of age) submits Form 15H and Form 15G is submitted by those who are below the age of 60 yrs.
New EPF Withdrawal Rules October 2016
The government has introduced new PF withdrawal rules. Here is a detailed description of Old v/s new rules.
- Withdrawal restrictions
Old Rule – If a person quits the job and remains unemployed for a time period of 2 months or more, then he/she can withdraw the entire EPF amount.
New Rule – A person cannot withdraw full EPF amount till the age of retirement. The PF account consists of contribution made by the employer, contribution made by employee and interest earned on employer and employee contribution. Now the contribution employer and the interest earned on it cannot be withdrawn till the age of retirement. Employee can only withdraw his contribution and interest earned on it.
Exception to new rule – The exemption is provided to female employees resigning from the services for reasons like getting married or due to child birth or pregnancy. They can withdraw the full EPF Balance without any restrictions.
- Retirement Age
Old Rule – The retirement age as per EPF withdrawal Rules was 55 yrs. Withdraw of the PF amount  of up to 90% of balance on attaining the age 0f 54 yrs was allowed.
New Rule – The age of retirement has been increased to 58 yrs. Person can withdraw up to 90% of PF balance on attaining the age of 57 yrs.
- PF Membership and employment
Old Rule – Person becomes the member with the joining of a new job once you leave the job and withdraws the PF balance, membership cease to exist.
New Rule – The membership would continue as the employee would not be able to withdraw the full PF balance till the age of retirement.
Dear sir,
If I have leave completing service 7 yrs and that Epf trf to PPF A/c is it possible how , what to do online or through EpF user
Balance enquiry
My acount balence
If submit form 15 G but now come tax liable due to increment, what to do. Or where to show income in itr.
EPF balance
Balence
Thanks for the update.
Is Public Provident Fund withdrawal/closure Taxable?
The Contributor enjoys a tax free interest at a rate higher than the Bank Interest under present tax regime.
Senior Citizens covered under this scheme should have been exempt from taxation on withdrawals.
The argument that the Senior Citizen has earned interest upon deposit and on the whole amount of interest from the Taxable part of income is not justifiable.
The interest does not take care even of the inflation let apart the capital. This capital was again restricted to Rs. 75,000/- and raised to Rs. 1,00,000/-.
If I were to take benefit of this scheme for 25 years the benefit would be as under:
Interest on Rs. 75,000/ was 8.75% when the rate of interest outside the scheme was between 10% to 15%. This interest is not comparable.
Capital of Rs. 75,000/- when withdrawn became taxable. This amount came into the highest rate of taxation.
Then the interest was reduced and the capital increased.
So what and where was the relief?
I worked for three years with Surya Roshni Limited and retired at the age of 62 years 6 month on January 2017. While paying for withdrawal the PF department in July 2017 deducted 10 percent TDS on amount of PF even when I was past retirement age of 57. During tnree years of my working with Surya I claimed 80 Cc deduction but Besides PF contribution I had investments of more than 2 lacs per year in insurances during that period.
How should i recover TDS amount in my tax assessment for current year.
Thank you guys,
This information is useful. Thanks a lot
Can CMPF (Coal Mines Provident Fund) be transferred to EPF? If yes then what is the procedure?
I have withdrawl my PF amount last week and they have deducted 35% from my PF because my PAN card is not updated kindly help I want my deducted balnce as well.
Sir, I had worked in an organization in U.P. for almost 20 years having EPF account. Around 2 years back I switched over my job & joined a startup organization in Delhi. The new organization has opened my new PF a/c with different UID . I have never withdrawn any amount from my previous a/c as well. Since last 2 years only new a/c is functional.
Sir I want to have only one UID (the old one) & like to to link my new PF a/c linked to my old PF a/c. Please advise & help me to do the same.
Hi,
Can someone advise me whether updating PAN in KYc in UAN porta is mandatory to transfer pf from one organisation to other ? My name in pan is not matching with IT records, however Aadhar updated.
Thanks
Vijayanand
How can I withdraw my partial PF in working condition, pls explain the procedure. Thank you.
Great information.. thanks ..
Keep updating…
First of all, I express my sincere thanks for this valuable information. However, I seek one clarification. My daughter was employed by Airtel and was engaged by the IBM in 2004. In 2017, IBM has closed down and one more company Amdocs has taken over the staff. She had to resign because of her compelled family circumstances.
She is at present 38 years. Under the circumstances, please advise me the valuable guidance as to how she should proceed further so far as the PF is concerned.
Keep sending useful information like this to enable us to update ourselves with the latest position, although your chief aim is to bore our attention with those monotonous and not-so-useful ads by inserting them everywhere in those articles.
Nice Article.But may explain the process of partial withdrawal in certain situations. Is it possible to withdraw our all Fundvalus in case where company get Satdown permanently?
Pf amount uan not activ
IS EPF PENSION TAXABLE AFTER NO WITHDRAWALS FROM THE FUND ?
I retired from service after completing 60 years of age in Aug. 2016..not with drawn my epf Amt so for…pl clarify wether interest cr. to my epf balance at the end of year 2018…Will be taxable or not?.
I dont know my PF number and I have the that so I also don’t know my employee ID when I visited the office they refused to give me the details so guys plss help me how can I withdraw my PF amount
i TOOK A CONTRACT EMPLOYMENT OF 2 YEARS AFTER MY REGULAR RETIREMENT I.E 60 YEARS. THE COMPANY WHERE IW AS ON CONTRACT WAS GIVING ME CPF BENEFIT AND REGULARLY CONTRIBUTING FROM 2011 TO 2013. I HAVE KEPT THE CPF CONTRIBUTION ACCUMULATION TILL DATE I.E COMPLETIG 5 YEARS ON THIS MARCH 2017. THE QUESTION IS CAN NOW WITHDRAW WITHOUT PAYING ANY TAX.
SOMANATH
Thanks for sharing info, good to clear doubt and understand the rule.
Hi, I m not in job for more then 7 months, and want to withdraw my pf, need to know that TDS will be deducted if i withdraw my entire PF amount or else if I dont withdraw it ,will it get any interest on it.Kindly suggest.
I joined after attending age of 60 years and left after 2 and half years of service. There after not employed any where. For EPF withdrawal I will have to submit form 15H and PAN card only. Please clarify.
I am above 60 years can I withdrawal all my
Of amount
Workar
Hello sir
My pf amount witdrawn on one year back at still now again witdrawn my mani sir.without company MD siginatur.through online procger please explain sir or mail me. THANKING YOU
After retairment at age of 60 …a member can receive interest…tax free for next three years..
Plz mere pf nhi plz follow
Dear Sir,
If tax department has been deducted tax. How can I get the refund.
I had already file ITR
But I get a main from ITR department . In the statement there are not showing any amt in refund statement. What should I?
I am 61 yes old
My of account no KD NSK 00542230000156 .After leaving the job applied for final withdrew the total amount for claim was Rs 60140/ .Amount transferred in my account Rs 39123. I have submitted form 15:H and Pan card .Pl provide me following .Why I WaS paid less. IWas any TDS deduction .if any the amount deduced .Am I supposed to get TDS deduction certificate .Do provide the details asked for so that I can submit my tax return for the year .