Log In Sign Up

Invest in Mutual Funds &
Get More Returns

Start Investing

Contribution towards an EPF account provides a benefit to individuals by way of a deduction under Section 80C(see how here). It would also be good to know what would be the income tax implications of EPF withdrawal. Interestingly, EPF withdrawal is taxable under certain circumstances and exempt under the certain circumstances.

The following table will help you easily understand the taxability on withdrawal of EPF:

Serial NoScenarioTaxability
1

Amount withdrawn is < Rs 50,000 before completion of 5 continuous years of service
No TDS.
However, If the individual falls under the taxable bracket, he has to offer such EPF withdrawal in his return of income
2
Amount withdrawn is > Rs 50,000 before completion of 5 years of continuous service
TDS @ 10% if PAN is furnished;
No TDS in case Form 15G/15H is furnished
3
Withdrawal of EPF after 5 years of continuous service

No TDS.
Further, the individual need not offer the same in the return of income as, such withdrawal is exempt from tax
4
Transfer of PF from one account to another upon change of job
No TDS.
Further, the individual need not offer the same in return of income as it is not taxable.
5Before completion of 5 continuous years of service, if

employment is terminated due to employee’s ill health
The business of the employer is discontinued
or the reasons for withdrawal are beyond the employee’s control

No TDS.
Further, the individual need not offer the same in the return of income as, such withdrawal is exempt from tax

 

Save Tax with 2x higher returns than FD/PPF

Invest in Tax Saving Funds