Income Tax on EPF: If you have invested in PPF, then you can withdraw money from it when you retire after the age of 60 years. At the same time, you can withdraw your money even before time.
Income Tax on EPF: Employee Provident Fund is a retirement scheme that helps you financially in your future. If you have invested in it, then you can withdraw money from it when you retire after the age of 60 years. At the same time, you can withdraw your money even before time. But there are some different tax rules for withdrawing money from EPF. Let us know when the tax will be imposed on withdrawing money from PF and after how much time it will not be applicable.
According to the new rules, interest will also be taxed on deposits of more than Rs 2.5 lakh in Provident Fund. In the current financial year, the fund is getting an interest rate of 8.5%. It is kept in EEE i.e. Exempt, Exempt, Exempt category. Apart from this, the benefit of deduction under section 80C is available on deposit in PM. Let’s know the new rule regarding tax.
What are the rules regarding tax
1. If you withdraw money from EPF before the completion of 5 years, then it will be taxed. Wherever 5 years are completed, then there is no tax on it.
2. A time period of 5 years is required for tax. Let us tell you that if you are not permanent in a company for 1 year and you are on payroll there for 4 years, then the employer will deduct TDS on withdrawing money. Because the company considers the period of 5 years on permanent payroll as complete in such cases.
3. There are also some special circumstances, where TDS is not deducted if money is withdrawn before 5 years. Such as the deteriorating health of the employee or the closure of the business of the employer. For this the company will not deduct TDS.
4. There are 3 major parts in EPF. First, the contribution of the employer, secondly the interest received on the contribution of the employee and thirdly the contribution of the employer and the interest received on it.
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