PF Withdrawal Rules and Tax Liability!

Q & A ForumCategory: Provident Fund (EPF & PPF)PF Withdrawal Rules and Tax Liability!
agupta asked 7 years ago
Hi, wanted to understand what are the tax liabilities in my case: I have been a pf member since 2008. Between 2008 and 2018, there have been two break in service....once for 8 months and once for 4 months. No PF contribution was made for this period of temporary unemployment. Otherwise I have been regularly making my PF + VPF contribution since 2008, during the periods that I have been employed. I have changed 3 jobs in between and at each of these jobs I have stayed for 3 yrs or thereabouts. At none of the jobs in my last 10 yrs have I stayed for the 5 years that is required for the Interest income from the PF to be tax free. My queries are -
  1. Since I have not spent 5 yrs at a stretch at a single Company, but have been member of the PF for 10 yrs. ++ without a break i.e. no withdrawals have been made but gaps in deposits due to the break in service only, would I get the tax benefits or my interest shall be taxed once I withdraw the pf amount.
  2. In case I convert the PF interest into an equated monthly payment...a sort of a monthly "salary"(I have a decent corpus) - is that possible? and would the interest be taxed first and then disbursed monthly?
Thanks in advance for your help.
1 Answers
Sreekanth Staff answered 7 years ago
Hi, 1 - If you have not made full PF withdrawals but consolidated (Transferred) all your EPF accounts then your total Service period is >5 years (2008 to 2018) and hence your total interest on PF balance is tax-exempt on withdrawal. In case, your total service period is more than 10 years then you can not withdraw EPS (pension balance) but have to apply for periodic pension once you attain Retirement age. 2 - I am assuming you are referring to EPS pension..   Related articles :
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