Income Tax on Employees Provident Fund (EPF) Withdrawl

Latest Update!

Interest rate on PF deposits increased to 8.65% from 8.55% for the FY 2018-19.

Contribution towards an EPF account provides a benefit to individuals by way of a deduction under Section 80 C . It would also be good to know what would be the income tax implications of EPF withdrawal. Interestingly, 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.ScenarioWhether 5 years of continuous Service Completed?Whether TDS Applicable?Additional care to be taken
1Amount withdrawn is Less than ₹50,000NoNoShow such EPF withdrawal in Income Tax Return.
2Amount withdrawn is More than ₹50,000NoYes @ 10% if PAN is furnished.
No if Form 15G/H is furnished
Show such EPF withdrawal in Income Tax Return.
3Any Amount withdrawnYesNoNo need to show such EPF withdrawl as income while filing Income Tax Return as such withdrawl is exempt as per Income Tax Laws.
4Transfer of PF from one account to another upon a change of jobNot applicableNoNo need to show such EPF as income while filing Income Tax Return as it has not been withdrawn.
5Employment is terminated due to employee’s ill health or the business of the employer is discontinued or the reasons for withdrawal are beyond the employee’s controlNoNoNo need to show such EPF withdrawl as income in Income Tax Return as such withdrawl is exempt as per Income Tax Laws.

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