People are facing economic problems due to Corona epidemic. To overcome this problem, people are withdrawing funds from the Employees Provident Fund (EPF).
Last year, the government gave permission to withdraw up to 75 per cent of the deposits in a special case for Corona. With the Corona crisis reverberating, withdrawals from the PF have increased once again. In such a situation, if you are also planning to withdraw the amount from EPF, then it is important to first know how much tax will have to be paid on it.
No tax on withdrawals after five years
If the employee completes five years of service in a company and withdraws PF, then there is no tax liability on him. The five-year period may also be inclusive of one or more companies. It is not necessary to complete five years in the same company. Apart from this, if you withdraw less than 50 thousand rupees from the PF before the job of five years, then there will be no tax.
Clearance limit also fixed
According to income tax rules, if you withdraw more than Rs 50,000 from EPF before five years, then 10% tax is levied. Apart from this, TDS and tax is deducted at 10% on non-completion of five years.
No tax on withdrawal for illness
Under the Income Tax rules, even if the employee has to leave the job before five years due to illness or due to the closure of business of the company, even if the employee withdraws PF before five years, in this case there is no tax. Apart from this, the withdrawal limit for the disease is not fixed, that is, he can withdraw the amount for it many times.
30% tax if not PAN
If there is no PAN under the Income Tax rules, TDS at the rate of 30 per cent will have to be paid on withdrawal from PF. However, such cases are rare as in most cases PAN is linked to EPF account. Experts say that PF withdrawal before five years of normalcy causes a double setback. Withdrawal of TDS on withdrawal also leads to loss of interest.
