Understanding TDS on PF Settlements: Is My Final Amount Tax-Free or Not?

Could anybody share the guidelines on TDS at the time of settlement vis-a-vis tax-free period calculation for PF? I worked in two organizations from 1/7/2002 and left the last settlement on 02/04/2007, whereas my PF remained with the last employer (having PF Trust) till date and was settled for payment on 30/5/2012. I have also worked in some other organization from 2/4/2007 till 01/06/2008, but PF couldn't get transferred due to a delay at the employer's end, though reminders were sent. Kindly advise whether the TDS will be applicable on it or the final amount will be exempted from it, whereas my previous company has deducted TDS on it.

Regards,
Asheesh

Income Tax Exemption on PF After 5 Years of Service

If the total service is more than 5 years, income tax is not applicable on PF. However, you must transfer the first service to the second one. Not only did the transfer not occur, but you have already settled the first service. Hence, obtaining an exemption from Income Tax is a rare chance.

Regards,
Abbas.P.S

Sir, thanks for your response. However, in my case, EMPLOYER A transferred to C, whereas EMPLOYER B & C both transferred to D. Also, as per the records of D, there is a gap of one month in continuation, and EMPLOYER D is asking for ANNEXURE K of all the previous employers, which is not available to me, and old employers are not willing to search old records. Otherwise, my tenure from EMPLOYER A to D is 11 years.

Since the PF was not transferred by D to E after repeated reminders, I had to withdraw both separately, i.e., D & E. Please advise whether I am eligible for INCOME TAX exemption. If yes, then HOW can I get it.

Regards,
Asheesh

Dear,

First, you get transferred from C to D, which was facilitated by A. Then, you can withdraw from employer D, and the amount will be tax-exempted. If you withdraw from employer E, your service should be more than 5 years to qualify for tax exemption. The best option is to transfer all accounts to E and proceed with the withdrawal. In this case, no tax will be deducted.