Wednesday, June 10, 2015


               Income Tax for Premature Provident Fund withdrawal of more than Rs.30,000

            The Government has announced that income tax will be imposed if, at the time of premature withdrawal, the Provident Fund amount is in excess of Rs.30,000.

            “Taxes will be imposed if, at the time of closing or transferring the PF account, the amount is in excess of Rs.30,000, and, if the employee has been employed in the current job for less than five years. Tax rebates are applicable. In order to claim tax exemption, the person has to submit a copy of his/her PAN card and Forms 15G and 15H, accompanied by a signed and filled up Form 19.

            “Failing to do so will attract maximum taxes of up to 34.61%. If the forms are submitted, only 10% taxes will be deducted. Taxes will not be imposed if an old PF account is being converted to a new PF account. If the employee has served for more than five years, then, at the time of closing his account, no taxes will be imposed.

           “The PF amount will also not be taxed if the employee is unwell, if the company has closed down, if the employment contract comes to an end, or if the employee loses employment for reasons that cannot be attributed to him/her.”