What is the new rules of PF?

To improve the residents' financial stability, India has enacted new PF withdrawl rules. Let me share the key updates here:

• If you are employed, you can not withdraw PF either partially or fully.

• You can not avoid the TDS deduction by submitting the form 15H or 15G.

• To avail the loan against PF, you should have been in service for a certain number of years.

• If you are unemployed for a month, you can withdraw 75% of PF but if you are unemployed for 2 months, you can withdraw the rest of the amount too.

• You can also withdraw your PF if your new job joining date is after 2 months from the last working day of the previous company.

• If you want to withdraw the funds within the 5 years of opening of your PF account, a TDS of 10% will be charged if you are a PAN card holder, otherwise 30% charge will be taken.

• If your UAN is activated, your old PF account will be directly transferred into a new one while you change your job.

I hope you understand what are the new rules for PF withdrawal in India.

Read more

In August 2021, the Government of India notified that according to new PF rules, there will be a tax deduction on employee contributions in the EPF account if the amount exceeds Rs. 2.5 lakhs annually. Confused? Let me take you through the whole course of action that followed and led to your question what is the new rules of PF. 

In her budget speech 2021-22, the Finance Minister Nirmala Sitharaman put forward a proposal stating that PF contributions on employees' end will be taxed if they are over Rs. 2.5 lakhs. Subsequently, the Central Board of Direct Taxes issued rules and directed that two separate PF accounts should be maintained - taxable and non-taxable accounts starting from April 1, 2022. The Income Tax Department was made aware of these changes too.

• Employer contribution in PF is 12% of basic salary + DA for non-government employees

• 12% of Employee’s basic salary is contributed towards EPF by employee as well.

• As per the directives, contributions made until March 31, 2022 shall not be liable for taxation

• Section 9D has been introduced under IT rules to bring a new tax on PF income from employee contributions above Rs. 2.5 lakh per annum.

This is all I know about new PF rules. If you have any more queries, drop them here.