When is the tax charged on withdrawal from Provident Fund? Know the important rules

If deposits are made in the Provident Fund account for five consecutive years, then there is no tax on withdrawals after that. TDS is deducted on withdrawal before that.

Apr 12, 2022 | 7:00 AM

As we know Provident Fund is a great scheme. It not only protects your old age, but also gives relief in tax (PF tax rules) at three levels. When deposited in the Provident Fund, the benefit of deduction under section 80C is available. Apart from this, the interest income and maturity are also completely tax free. This fund helps you in old age when you retire. If someone wants to withdraw from it in the middle, then it is possible, but it is necessary to know about the tax rules.

If deposits are made in the Provident Fund account for five consecutive years, then there is no tax on withdrawals after that.  If it is not deposited and withdrawn continuously for five years, then it is taxed.  The five-year period covers both your current and former employers.

If deposits are made in the Provident Fund account for five consecutive years, then there is no tax on withdrawals after that. If it is not deposited and withdrawn continuously for five years, then it is taxed. The five-year period covers both your current and former employers.

TDS is deducted if the withdrawal is made before the completion of the period of five years.  No TDS is deducted on withdrawal after five years.  If less than 50 thousand withdrawals are made before five years, then TDS is not deducted.  However, information about this is given during the filing of return.

TDS is deducted if the withdrawal is made before the completion of the period of five years. No TDS is deducted on withdrawal after five years. If less than 50 thousand withdrawals are made before five years, then TDS is not deducted. However, information about this is given during the filing of return.

If more than 50 thousand is withdrawn before five years, then 10 percent TDS will be deducted.  TDS will be deducted only in case of non-deposit of PAN.  TDS will not be deducted if Form 15G or 15H is submitted.

If more than 50 thousand is withdrawn before five years, then 10 percent TDS will be deducted. TDS will be deducted only in case of non-deposit of PAN. TDS will not be deducted if Form 15G or 15H is submitted.

TDS will not be deducted on withdrawal after completion of five years.  This withdrawal is completely tax free and does not need to be mentioned in the income tax return.

TDS will not be deducted on withdrawal after completion of five years. This withdrawal is completely tax free and does not need to be mentioned in the income tax return.

If an employee is fired before the completion of five years.  If the employee has to leave the job due to ill health or the company is closed, then in this situation TDS is not deducted on withdrawal.  In this circumstance, it is not necessary to provide information about the withdrawal in the return.

If an employee is fired before the completion of five years. If the employee has to leave the job due to ill health or the company is closed, then in this situation TDS is not deducted on withdrawal. In this circumstance, it is not necessary to provide information about the withdrawal in the return.






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