Moving Abroad for Work: How to Handle Tax on Provident Fund Withdrawal?

I have completed a contract in my present organization and have served for 4 years. I am now moving to China for a new job assignment. I am unable to transfer my PF there as it is not applicable. If I withdraw the PF here, I will have to pay tax. This situation is beyond my control. Do I need to pay tax on PF withdrawal, or is there a way to avoid it?

You do not have to pay income tax. You can fully withdraw your PF without waiting for two months.

Regards, Varghese Mathew

I have a PF account with a school's PF trust. I have served the school for 3.9 years, and now my contract is over with the school in June. I am moving to Hong Kong for another job, and I will be an NRI in July. I cannot transfer my PF abroad as there is no provision, and I do not want to withdraw it. The school authorities are saying that they will deduct TDS on this PF, and even if I withdraw it next year, I will have to pay tax on it. I have no option in front of me on what to do to save tax as they are planning to cut TDS and give me my hard-earned money after deducting tax before I go abroad. There is a provision in the PF rules that this could be tax-exempt if there are circumstances beyond control. Now, please, could you help me in this as to what could be done in this situation and whether I still have to pay TDS when I have no other option to transfer my PF as I am moving to a different country for work.

Better to withdraw the same. In the matter, you need not wait for two months. Simply attach the offer letter copy, your passport, and visa copy duly attested by your employer with Form 19 and 10C. Your claim will be settled at the earliest.

Thanks and regards,
Sumit Kumar Saxena

PF is non-taxable. You can withdraw it in three months. After that, you will not get interest on that amount.