Tax on PF withdrawal amount

I worked with my first Employer for 7 year & 5 months from Sep-2002 to Feb-2010. They have changed name of organization four times thru mergers or reorganizations.

Even they have changed my PF account once.

My first PF account was from Sep-2002 to Sep-2007 and second PF account was from Oct-2007 to Feb-2011 when i left the organization.

I received PF withdrawal amount this month.

Please suggest if any Tax is applicable and if yes than how to calculate the same.

Regards, Nazir

asked Jan 30 '12 at 14:57 by nazir_2912 1111


Income tax is payable if EPF balance is withdrawn before five years of continued service (can be with more than one employer but account has to be transferred in that case).

Following components have to be added to person's taxable income to compute tax liability:
1. Interest paid by EPF department on employee contribution.
2. Interest paid by EPF department on employer contribution.
3. Amount deposited as employer contribution.

In your case there is service of more than five years, so income tax would not be payable for first PF account. But in case of second account, service is less than five years so income tax would be payable on second withdrawal.

However, If account balance from second account was transferred to first, then it will be a continued account and hence no income tax would be payable.

answered Jan 30 '12 at 16:54 by Pankaj Batra 5.2k320

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Thanks Pankaj for prompt response. Please clarify your statment. if "In your case there is service of more than five years, so income tax would be payable for first PF account" or In your case there is service of more than five years, so no income tax would be payable for first PF account
(Jan 30 '12 at 17:01) nazir_2912
sorry for the typo, answer has been edited above.
(Jan 30 '12 at 17:02) Pankaj Batra

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Asked: Jan 30 '12 at 14:57

Seen: 2,634 times

Last updated: Jan 30 '12 at 17:02