Income Tax on EPF Withdrawal

Contribution towards an EPF account provides a benefit to individuals by way of a deduction under Section 80 C of IT Act, (You can claim a deduction of Rs 1.5 lakh your total income under section 80C. In simple terms, you can reduce up to Rs 1,50,000 from your total taxable income)

EPF withdrawal is taxable under certain circumstances and exempt under the certain circumstances.

The following table will help you easily understand the taxability on withdrawal of EPF

Sr.No.	Scenario	Taxability
1	Amount withdrawn is < Rs 50,000 before completion of 5 continuous years of service	No TDS. However, If the individual falls under the taxable bracket, he has to offer such EPF withdrawal in his return of income
2	Amount withdrawn is > Rs 50,000 before completion of 5 years of continuous service	TDS @ 10% if PAN is furnished; No TDS in case Form 15G/15H is furnished
3	Withdrawal of EPF after 5 years of continuous service	No TDS. Further, the individual need not offer the same in the return of income as such withdrawal is exempt from tax
4	Transfer of PF from one account to another upon a change of job	No TDS. Further, the individual need not offer the same in return of income as it is not taxable.
5	Before completion of 5 continuous years of service\ if employment is terminated due to employee’s ill health The business of the employer is discontinued or the reasons for withdrawal are beyond the employee’s control	No TDS. Further, the individual need not offer the same in the return of income as such withdrawal is exempt from tax