1. The tax treatment of a recognized/statutory Employees Provident Fund (EPF) is E-E-E, i.e. your money is tax-exempt at the time of investment, accumulation and withdrawal.
2. At the time of investment, the tax deduction is under the Rs.1.5 lakh limit of section 80C.
3. Partial withdrawals are tax-free if made after 5 years of continuous service, even with different employers, subject to transfer of EPF account too.
4. In case withdrawal is before 5 years, the amount becomes taxable in that financial year.
5. Tax Deduction at Source (TDS) will be deducted at 10 % provided Income Tax Permanent Account Number (PAN) is submitted, otherwise, TDS is deducted at the maximum marginal rate of 34.608 %.
6. However, if the reason for withdrawal is termination of employment due to discontinuance of employer’s business or ill health, it is tax-free too.
7. Female employees, resigning any time from the services for getting married or due to childbirth or pregnancy, can withdraw the whole EPF amount without any tax deduction.
8. Any employer's contribution above 12% of salary, and any interest paid above 9.5%, are added to the Salary Income for taxation purposes.
2. At the time of investment, the tax deduction is under the Rs.1.5 lakh limit of section 80C.
3. Partial withdrawals are tax-free if made after 5 years of continuous service, even with different employers, subject to transfer of EPF account too.
4. In case withdrawal is before 5 years, the amount becomes taxable in that financial year.
5. Tax Deduction at Source (TDS) will be deducted at 10 % provided Income Tax Permanent Account Number (PAN) is submitted, otherwise, TDS is deducted at the maximum marginal rate of 34.608 %.
6. However, if the reason for withdrawal is termination of employment due to discontinuance of employer’s business or ill health, it is tax-free too.
7. Female employees, resigning any time from the services for getting married or due to childbirth or pregnancy, can withdraw the whole EPF amount without any tax deduction.
8. Any employer's contribution above 12% of salary, and any interest paid above 9.5%, are added to the Salary Income for taxation purposes.