EPF Withdrawal: Many people are confused about whether the amount deposited in EPF fund is taxable or not. Today we will tell you through this article when is tax levied on withdrawal of money from EPF fund? Apart from this, also know about the rules related to EPFO. Let us tell you that along with the employee, the company also contributes to the PF account. Let us know about it in detail.
Employees Provident Fund also known as Provident Fund or PF. This is the most popular scheme for continuing income even after retirement. Employees deposit 12 percent of their salary in this fund every month. Along with the employee, the company also contributes 12 percent. Interest is also given by the government on the amount deposited in this fund.
Income Tax Department collects tax on income received from bank account like interest, house rent etc. Well, similarly the amount deposited in PF account is also taxed. Earnings from EPF account are taxed under many different circumstances. Today we will tell you when is tax levied on withdrawing money from PF?
EPF account rules
According to EPF rules, whenever an employee withdraws money from PF fund, he has to fulfill certain conditions. The entire amount from PF fund can be withdrawn only after retirement. EPFO has set 55 years for this. Any employee can withdraw only 90 percent of the amount from PF fund before retirement.
Whereas if a person has lost his job, then he can withdraw 75 percent from the PF fund in the first time and the entire amount in the second time. All employees need to keep in mind that before withdrawing money from PF fund, they will have to submit some documents. Along with this, withdrawal from PF fund can be done only with certain conditions.
When is tax levied on withdrawing money from EPF?
If we talk about when tax is levied on EPF account, then let us tell you that there is no tax on EPF account. Tax deduction can be claimed under Income Tax Act 80C. If the interest received on employee’s contribution or income from any other source is taxable, then it is taxed.
Apart from this, the contributions made by the company and the interest received on it are also fully taxable. If an employee withdraws money from the PF fund before working in a company for 5 years, then TDS is deducted. At the same time, if he works in a company for 5 years and after that withdraws money from the PF fund, then no tax of any kind is deducted on it.
