Is PF withdrawal taxable?

I think Employee’s Provident Fund is a very effective tool for citizens of our country to save for their future. One question that everyone asks beforing investing in PF is “is PF withdrawal taxable” Well let me tell you that withdrawals made after 5 successive years of contributions are tax-free to make sure that employees stay invested in their provident fund.

Moreover, EPF contributions are tax-deductible under the Income Tax Act (Section 80C). If you withdraw the amount before 5 years of complete service, then you are subject to tax or TDS. However, there are some cases when you don’t have to pay tax despite not meeting the mentioned EPF withdrawal rules. Here are some cases:

• If the total provident fund amount is less than Rs. 50000, then the withdrawal can be tax exempted.

• When an employee transfers his PF money from one PF account to another, then TDS won’t be applied on the transferred amount.

• If an employee has become sick and needs the PF money to pay for his medical expenses, then EPFO allows them to make a tax-free withdrawal. However, he will have to prove that he has discontinued working or his business due to illness.

• The withdrawal can be tax exempted if the employee submits Form 15H or Form 15G along with his/her PAN card details. This applies if the total provident fund amount is equal to or more than Rs. 50,000.

Once you have completed five years of continuous contributions towards the EPF, you are allowed to make a withdrawal that isn’t subject to TDS. However, you should allow the PF contributions to accumulate in your PF account as the accrued interest on the standing PF balance is tax-free. So, you should only withdraw money after the maturation date.

 Now you know everything about the taxability of PF withdrawal.

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I hope now you know the answer to your query on “is PF withdrawal taxable”