For employed people, PF is an investment that not only gives them good interest on money, but also provides the facility to withdraw money when needed. You can withdraw your money from PF account on some special occasions.
For employed people, PF is an investment that not only gives them good interest on money, but also provides the facility to withdraw money when needed. You can withdraw your money from PF account on some special occasions. But, do you know that if you are withdrawing money from a PF account five years ago, then you may also suffer loss. Yes, there is a rule of EPFO, according to which if you withdraw your money from five years, then you may have to pay tax on it.
In such a situation, if you are also trying to withdraw money before the PF account is five years, then you should take care of this rule. From this you can find out how much money will be taxed and how you can avoid it. However, if you do not need much, then you should avoid withdrawing money from PF account. In such a situation, you know what is this rule and what is its effect…
What does this rule say?
According to a Money 9 report, if an employee has been working for less than 5 years and his PF account has not been held for 5 years, then this rule applies to him. In such a situation, if the money is withdrawn before the completion of the five-year period, then TDS and tax is levied on this money at the rate of 10 percent, that is, you have to pay some part of it to the government. At the same time, if the account has been more than five years, then this rule does not apply and nothing has to be paid to those account holders.
By the way, the special thing is that it is not that you have five years in any one company. If you have worked in one or more companies and you have been working for more than five years, then you will not have to pay tax. However, if the amount is 50 thousand or more and the duration is less than five years, TDS can be saved by submitting Form 15G or 15H. In case of not having PAN card, 30% TDS will have to be paid. In such a situation, you should talk about this rule before withdrawing money before five years, otherwise you will have to pay tax.
Is there so much loss due to withdrawal of money?
If you have 30 years in your retirement and you withdraw 50 thousand rupees, then there is a loss of 5 lakh 27 thousand rupees. At the same time, there is a loss of 11 lakh 55 thousand rupees on 1 lakh rupees, 23 lakh 11 thousand rupees on 2 lakh rupees, 34 lakh 67 thousand rupees on 3 lakh rupees. At the same time, if there is 20 years in your retirement and you withdraw 50 thousand rupees, then you lose 2 lakh 5 thousand rupees. Similarly, loss of Rs 5 lakh 11 thousand rupees on 1 lakh rupees, 10 lakh 22 thousand rupees on 2 lakh rupees, 15 lakh 33 thousand rupees on 3 lakh rupees.
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