New Delhi, Business Desk. With the change in rules by the Employees Provident Fund Organization (EPFO), partial or full withdrawal from the Employees Provident Fund (EPF) has become easier and faster. Subscribers can make a partial withdrawal from their EPF account through online. The EPFO has allowed the employee to withdraw up to 75 per cent of the amount from the EPF fund after one month of leaving the job. If an employee remains unemployed for more than two months, he can withdraw 100 percent of his EFF account. There are many things to keep in mind before withdrawing from EPF account. Let’s know what these are.
1. Withdrawal from EPF amount is taxed if the employee has not completed the five-year service period.
2. If you have transferred your EPF account from the old employer, then the old service balance will also be included in the calculation of total service period for tax.
3. If the total period of service in the year of withdrawal is less than five years, the withdrawal amount will be taxed.
4. Keep in mind that the EPF account amount is in four parts. Employee’s contribution, employer’s contribution and interest on both contributions.
5. If the period of continuous employment is less than five years, the employer’s contribution to the EPF and the interest thereon will be taxable under the ‘Income’ category in the Income Tax Return.
6. If the withdrawal occurs before the five-year service period and you have claimed exemption on contribution under Section 80C of the Income Tax Act, the employee’s own contribution will also be taxable under the ‘salary’ category.
7. In the event of withdrawal before five years, the interest received on the customer’s own contribution to the EPF will be taxed under the ‘Income from other sources’ category.
8. Withdrawal before the continuous employment period of five years attracts TDS @ 10%.
9. However, TDS will not be deducted if the amount is less than 50,000 or the company has ceased operations.
10. If the employee’s net income for that financial year is less than the taxable income limit, then TDS deductions can be prevented on EPF withdrawal by filling in Form 15G / 15H.
We have taken all measures to ensure that the information provided in this article and on our social media platform is credible, verified and sourced from other Big media Houses. For any feedback or complaint, reach out to us at informalnewz@gmail.com
