Understanding PF Withdrawal: What Are the Rules and Tax Implications?

I would like to know the rules of PF withdrawal. Details mainly needed are:

1. How old should the PF account be for withdrawal?
2. Is the PF withdrawal amount taxable or non-taxable?
3. If taxable, what is the tax deduction percentage?
4. What is the percentage interest on the PF amount?

Thanks in advance.

Regards,
Asna

You can withdraw the PF amount after 2 months from your date of resignation. If you want to withdraw, you should fill Form 19 & 10C along with a cancellation cheque of the withdrawal member. If you worked for at least 6 months, then you can withdraw 24% (12%+12%) of your accumulated amount; otherwise, you will get 15.67% only.

PF amount is not taxable. PF interest would be announced by PF authorities at the end of the PF financial year. Presently, the interest rate would be 8.25%.

Thank you for sharing the information with us. I heard that to withdraw the PF amount, the PF account should be at least 5 years old. If we intend to withdraw the PF amount before 5 years, some percentage of tax is applicable. Is this statement correct?

Regards,
Asna

Taxability of PF Withdrawal

I understand that the PF amount withdrawn after 5 years is not taxable, but it is taxable if withdrawn before 5 years. Other members may confirm this.

Regards,
B. Saikumar
HR & Labour Law Advisor
Mumbai