tds on pf withdrawal

Tax on PF Withdrawal: Calculate TDS on EPF {Provident Fund}

Tax on PF Withdrawal {Deduction}

Here is a guide for calculating tax on PF withdrawal. If you are withdrawing your EPF amount before 5 years of service, it is taxable. You need to do the tax deduction for the same. No tax will be levied if you withdraw after completion of 5 years of your service. Right from its introduction, Employee Provident Fund is popularly a tax-free saving vehicle. The proposal made for New TDS Rules on EPF is likely to be reviewed after strong protests from trade unions. The proposal to tax 60% of PF withdrawal from 1st April 2016 has been currently withdrawn. We have given here the new tax deduction on EPF amount. The latest upheavals going on in EPF interest rate and TDS are followed in this post. Check out the up to date rules of tax deduction on EPF. Our site is dedicated to bringing all updates on EPF rules and procedures. This post brings you latest rules for tax on PF withdrawal.

Till now, the amount withdrawn from PF account after 5 years of service was fully tax exempted. Government created stir by proposing changes in Budget 2016. In February 2016, Government proposed to tax 60% of employee contribution. The notification of tax on PF withdrawal was said to be implemented from 1sth April 2016. The proposal was strongly protested by opposition, labor unions, and salaried middle class. This forced Finance Minister to roll back the proposal to tax PF withdrawal after 5 years just over a week. This move was proposed by Government to bring NPS at bar with EPF. 40% of NPS withdrawal on maturity are now made tax-free. If you are a working person, these updates are very significant for you. Hence, we have stated here details of tax on PF withdrawal.

Tax Exemptions on PF Withdrawal

The tax can be levied on PF withdrawal only if both the following conditions are present:

  1. PF is being withdrawn before minimum period of 5-year service
  2. The amount is more than Rs. 30,000/-

This means there will be no tax if PF withdrawn is less than Rs. 30,000 even if you are withdrawing it before lock period of 5 years. You can know your PF status before making any withdrawal. A detailed information on epf balance status enquiry is already covered on the homepage of the website.

There will be no tax at all on PF withdrawal after completion of 5 years. Almost all investment schemes come with a minimum period for the tax deduction. The withdrawal of proposal came as a relief for salaried class. The TDS will be not levied in any case if the EPF amount is claimed before minimum membership period.

tax on pf withdrawal calculation

TDS Calculation on PF Withdrawal Before 5 Years

In any case, if you are withdrawing your EPF amount before completing 5 years in service, there will be a tax deduction. But there are some conditions which allow zero tax on PF withdrawal within minimum lock period. If you are looking to withdraw the amount, then you can download pf withdrawal form. Find below the criteria depending on which PF amount will be taxed if claimed within 5 years’ service:

tax on pf withdrawal

No TDS on PF withdrawal at all (before 5 years) in following conditions:

  1. If the PF amount is just transferred from one PF account to another.
  2. If employee is terminated from service due to medical reasons / closure of company by employer / completion of project / other conditions beyond the employee’s control
  3. If PF amount is less than Rs. 30,000/-
  4. If PF amount is equal to or more than Rs. 30,000 but he/she submits PAN and Form 15G/15H

Tax Deduction for withdrawal before 5 years:

  1. Tax on PF withdrawal will be @ 10% if PAN is submitted but Form 15G/15H not submitted (only for amount equal to or more than Rs. 30,000)
  2. If no PAN is submitted, tax will be @ 34.608%

Also, note that the tax on PF will be deducted at the time of payment only. Form 15H is subscribed for senior citizens above 60 years. Form 15G is subscribed for individuals without taxable income. It is mandatory to fill in PAN number in Form 15G and 15H.

If you have any confusion regarding tax on PF withdrawal, do leave your queries here. Tax deduction on PF is a major concern for salaried people who leave a job. The PF rules are updated every year by the Ministry of Finance. Your TDS and other challan status are available in case if you are looking for it. In the case of any issue with your PF withdrawal, you can register your grievance at the official EPFO portal. Visit and click to register your grievances. It can be related to PF withdrawal, insurance benefit, transfer of account and any other. Do not forget to check our detailed information on PF withdrawal and EPF rules.

4 thoughts to “Tax on PF Withdrawal: Calculate TDS on EPF {Provident Fund}”

  1. I worked 3 years in.hcl and then 3 years in ericsson. I transferred Pf from hcl to ericsson. Will my pf withdrwaal be taxable.

  2. I have done service in a company for 3 years 2 months.Now Its been a year leaving job and i have a pf balance of 90000 Rupees.Since I have not completed 5 years, I wanted to know what amount i will get if i go for withdrawal considering i have PAN number.
    Also need to know what if i withdraw this amount after one year?will it make any change in tax deductions?

  3. Can you Clarify if you can inform me the service is less than 5 years, but retired at the age of 58 years would there be a tax on less than 5 years service on retirement


  4. My case is similar to the issue of Mr. C.KIRUBASEKARAN. I have also retired on superannuation before serving 5 years from a company. The rule position is not crystal clear. In as much as attaining age of superannuation is not in the hands of employee, this case should fall in the exception to the rule viz. if the employee withdraws the PF amount on retirement due to ill health, or the employer discontinuing his business or any other circumstance which is beyond the control of the employee. The employee in the subject case as is mine, does not have opportunity to transfer his amount to any other PF account since after 58 years one is not eligible to PF contribution. More over, all superannuation benefits are fully exempted from IT. Therefore the withdrawal amount should be exempted. I may be corrected if I am wrong, with proper explanation

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