• PF Withdrawal Rules: Under Income Tax rules, provident fund amount withdrawn before five years of opening PF account, the entire amount is taxable
New Provident Fund (PF) Withdrawal Rules: Presenting the Union Budget 2023, Finance Minister Nirmala Sitharaman proposed to reduce the Tax Deducted at Source (TDS) for the taxable component of Employees' Provident Fund (EPF) from 30 per cent to 20 per cent. Gave. Scheme for non-PAN cases. However, other income tax rules will remain the same. As per income tax rules, if a PF or EPF account holder goes for his/her EPF withdrawal before completion of 5 years of account opening, in that case, the entire withdrawal amount will be taxable and the PF contribution above ₹2.5 lakh per year Will also remain. taxable.
"At present the TDS rate on withdrawal of taxable component from Employees' Provident Fund Scheme in non-PAN cases is 30 per cent. It is proposed to be reduced to 20 per cent as in other non-PAN cases," Nirmala Sitharaman had said in Parliament at the Union Presenting the budget said.
Simplifying the new PF withdrawal rule for non-PAN cases, Mumbai-based tax expert Balwant Jain said, “PF withdrawal is taxable if the withdrawal is made before five years of opening the PF or EPF account. PAN card, then no TDS will be levied on the withdrawal amount.PF withdrawal amount will be added to the total taxable income of the PF account holder in the year of withdrawal and tax will be applicable based on the income tax slab applicable to the PF account holder. "
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