Is P.F Withdrawal Taxable ? - income tax.. CiteHR

jiguparmar Started The Discussion:

I need advise on following matter. I have still not withdrw my PF from my old company, I am planning either Withdrawal or Transfer my PF so What is best and easy option ? Is PF withdrawal taxable?

kuttimahesh -  Member Since: Jul 2011
Hi Madhu,

I worked for an organization from July 05 - May 07. i would like to withdraw PF now.
Will it be taxable?
I heard that if we have not completed 5yrs with that PF account, there will be 33% tax on withdrawal amount.


Madhu.T.K -  Member Since: Sep 2007
If the PF is administered by EPF Organisation, then it is non taxable even if it is withdrawn before five years. However, depending upon the trust rules , the amount held in private trust may become taxable if withdrawn before a specific period, ie, five years. However, the Income Tax department has put an objection to the EPF Organisation for not making the withdrawal before five years taxable.



kuttimahesh -  Member Since: Jul 2011
Thanks madhu. i heard that PF organization gave notification in 2010 Dec/Jan 20111 asking all practitioners to settle 2-3 years old pf account before 31 march 2011, in failure of the same they will be put on default and no tax will be given on PF amount?

is it valid information?

awaiting favorable response
thanks in advance.


Madhu.T.K -  Member Since: Sep 2007
Sorry, I didn't get you. PF asked all 'practitioners' to settle accounts .....and in 'tax' will be paid....?

There was a circular stating that if an account remains inoperative for more than 3 years, then no interest will be paid to that account for such period exceeding 36 months( 3 years). Is it that you meant?


kuttimahesh -  Member Since: Jul 2011
yes i mean that. if an account remains inoperative for more than 3 years, then will no interest will be paid to that account for such period exceeding 36 months( 3 years)?

Madhu.T.K -  Member Since: Sep 2007
The circular is in force. Therefore, if any PF account is remaining inoperative for three years, please do withdraw the PF accumulations and if required collect a scheme certificate for the Pension Fund. Naturally, if you had worked in the organisation for at least 10 years, you can not withdraw the Pension Fund and in such situation you have to go for Scheme Certificate only.



raghvendra.76 -  Member Since: Sep 2008
I worked in a company from May 07 to Aug 11 & currently employed elsewhere.
Q-1 : If I go ahead & withdraw my PF, will it be taxable.?

The last company is Genpact, which may or may not have deposited the sum in EPFO.
Q-2: If "Y" for Q1, My salary component for which I have already paid Taxes, why the withdrawal be taxable?

Appreciate your help in advance.



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