Hi all,
I resigned from my job 2 months ago and filled out the EPF withdrawal form along with a blank cheque from my savings account. Currently, I am pursuing higher studies.
Can you please address the following questions:
1) Will the EPF withdrawal money be directly credited to my savings account, or will I receive an account payee cheque by post at my specified address?
2) My EPF account was only 3 years and 4 months old. If I withdraw the money this year, will it be considered taxable income? I have not been earning since April of this year (for the entire financial year), so do I need to declare the amount (1 lakh) in my IT return for this financial year?
3) How long will it take for my EPF withdrawal to be processed? Do I need to follow up with my company or the regional EPFO for it?
Any help is appreciated.
Regards,
CP
From United Kingdom, Ruislip
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I resigned from my job 2 months ago and filled out the EPF withdrawal form along with a blank cheque from my savings account. Currently, I am pursuing higher studies.
Can you please address the following questions:
1) Will the EPF withdrawal money be directly credited to my savings account, or will I receive an account payee cheque by post at my specified address?
2) My EPF account was only 3 years and 4 months old. If I withdraw the money this year, will it be considered taxable income? I have not been earning since April of this year (for the entire financial year), so do I need to declare the amount (1 lakh) in my IT return for this financial year?
3) How long will it take for my EPF withdrawal to be processed? Do I need to follow up with my company or the regional EPFO for it?
Any help is appreciated.
Regards,
CP
From United Kingdom, Ruislip
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Dear CP,
EPF has been mandated by the government for employees to have some amount of savings, which employees would not normally do as they have various commitments, whether financial, personal, or related to family matters. When an employee is no longer employed, they can withdraw their PF amount to sustain themselves and their families. This is why PF withdrawal takes place only after 45 days from an employee's date of relieving from their last company.
To address your queries:
1) If you have specified a savings account number to which the amount should be credited, the PF office will send the cheque directly to the bank for the amount to be credited to you. If you have not specified the account number, then the cheque will be sent to the address given in the PF withdrawal form.
2) EPF withdrawals are not taxable under any circumstance. As mentioned earlier, it is a form of savings, similar to Post Office savings, Indira Vikas Patra, Life Insurance policies, etc., which we typically do before the end of the financial year to reduce our tax liability and to have some savings in case the employee is no longer employed profitably anywhere. Therefore, there is no need to declare it in your IT return.
3) The usual process takes 30 days from the date of receipt of your application at the concerned regional PF office. It is advisable to keep track with both your company and the PF office to ensure there are no unforeseen delays.
I hope this clarifies your queries.
Regards,
Samba Siva.
From India, Hyderabad
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1EPF has been mandated by the government for employees to have some amount of savings, which employees would not normally do as they have various commitments, whether financial, personal, or related to family matters. When an employee is no longer employed, they can withdraw their PF amount to sustain themselves and their families. This is why PF withdrawal takes place only after 45 days from an employee's date of relieving from their last company.
To address your queries:
1) If you have specified a savings account number to which the amount should be credited, the PF office will send the cheque directly to the bank for the amount to be credited to you. If you have not specified the account number, then the cheque will be sent to the address given in the PF withdrawal form.
2) EPF withdrawals are not taxable under any circumstance. As mentioned earlier, it is a form of savings, similar to Post Office savings, Indira Vikas Patra, Life Insurance policies, etc., which we typically do before the end of the financial year to reduce our tax liability and to have some savings in case the employee is no longer employed profitably anywhere. Therefore, there is no need to declare it in your IT return.
3) The usual process takes 30 days from the date of receipt of your application at the concerned regional PF office. It is advisable to keep track with both your company and the PF office to ensure there are no unforeseen delays.
I hope this clarifies your queries.
Regards,
Samba Siva.
From India, Hyderabad
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Circular No 1-2018 Processing of income-tax returns under section 143(1) of the Income-tax Act .pdf
TAXABILITY ON EPF WITHDRAWAL.docx