Tax calculation on PF withdrawal

I'd quit NIIT in 2009 and last year in Sept. 2010 I received PF withdrawal of Rs. 203,000 from 3 years of employment. NIIT has some PF trust so my PF wasn't from PF Commissioner. At the same time NIIT has deducted TDS of 30% (Rs. 63,000) from this amount.

Today when I called the concerned person in NIIT I told him that employee's contributing is not taxable. But he said that full amount is taxable.

As far as I know Employer's contributing and PF interest is taxable before 5 years of completion.

What is correct?

asked Aug 01 '11 at 12:04 by rag_gupta 1122


Some portions of EPF are taxable if its withdrawn before completion of 5 years in service.

Following components have to be added to person's taxable income to compute tax liability:

  1. Interest paid by EPF department/trust on employee contribution.
  2. Interest paid by EPF department/trust on employer contribution.
  3. Amount deposited as employer contribution.

Considering above components, compute your income tax again. You should file income tax return to get refund for extra tax deducted.

answered Aug 01 '11 at 19:51 by pankaj 5.2k320

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Asked: Aug 01 '11 at 12:04

Seen: 2,566 times

Last updated: Aug 01 '11 at 19:51