Confused About PF Withdrawal? Seeking Clarity on Tax Deductions and Legal Clauses

Hi, I have some queries regarding the withdrawal of Provident Fund. Kindly guide me for these three questions.

1) What is the tax deduction in case of withdrawal of PF? As far as I know, only Employee PF and interest are liable to be considered taxable income. Now, my question is, will they deduct the tax at the time of disbursement of the amount? If yes, then how will they determine the tax slab I fall under as they might not be aware of my current annual income?

2) No tax deduction after 5 years of service - does it mean 5 years of active account (if someone leaves the job and transfers the PF) or 5 years of continuous service in a single company.

3) Is there any clause in the Indian legal system under which any company can stop the clearance of provident fund of the employee?

Waiting for the detailed reply.

Thanks & Regards,
Munish Gupta
+919848144805

Reply:

1) What is the tax deduction in case of withdrawal of PF? As far as I know, only Employee PF and interest are liable to come under taxable income. Now, my question is, will they deduct the tax at the time of disbursement of the amount? If yes, then how will they come to know in which tax slab I stand, as they might not be aware of my current annual income?

No TDS is deducted on withdrawal.

2) No Tax deduction after 5 yrs of service - does it mean 5 years of an active account (if someone leaves the job and makes the PF transfer) or 5 years of continuous service in a single company.

As per point 01.

3) Is there any clause in the Indian legal system under which any company can stop the clearance of provident fund of the employee?

As per law, Accumulations cannot be ceased or attached under any award of the court of law; accordingly, any employer cannot stop the clearance of the provident fund of the employee. Even if in case the employer is not traceable, RPFC or the Bank Managers can attest the employee details for the withdrawal of PF.

Hi Anurag,

In these forums, I had read somewhere that a tax of 30% will be deducted. My PF account is with Noida, UP.

Regarding the second question, could you please clarify whether it refers to 5 years of an active account (if someone leaves the job and transfers the PF) or 5 years of continuous service in a single company?

Thanks & Regards,

Munish