Tax Treatment of EPF on withdrawal before 5 years

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  1. ANONYMOUS1958

    ANONYMOUS1958 New Member

    XYZ worked in an organisation for 3 years. He left the company on 26.12.15.
    XYZ now wants to withdraw his EPF amount.
    What will be tax treatment for him on withdrawal of such amount.
     
  2. Chandrashekar M

    Chandrashekar M Active Member

    If the employee has rendered continuous service with his employer for five years or more, then the withdrawal of accumulated balance from such PF is not taxable at the time of termination. Since the period of your services with the ex-employer is three years which is less than five years, you shall be liable to tax on the amount withdrawn from your PF. In addition to the normal tax payable by you,

    Regards
    Chandrashekar
    http://incometaxdoubts.wordpress.com
     
  3. ANONYMOUS1958

    ANONYMOUS1958 New Member

    Thanks for your reply.
    But i would also like to know that what will be the tax effect on amount on which he has earlier claimed deductuon u/s 80C ??
     
  4. Chandrashekar M

    Chandrashekar M Active Member

    The tax deductions claimed U/s.80C on your contributions to EPF claimed in the previous years will be rolled back, and shall be liable to tax.
     
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