New PF withdrawal rule: Check this in FY24 while filing Income Tax Return - Hindustan Times
close_game
close_game

New PF withdrawal rule: Check this in FY24 while filing Income Tax Return

Feb 05, 2023 01:52 PM IST

According to the Income Tax rule, if money is withdrawn from the EPF account before the completion of five years of the account opening, the whole withdrawal amount would remain taxable.

Union finance minister Nirmala Sitharaman proposed to reduce Tax Deduction at Source (TDS) from 30% to 20% for the taxable part of the Employees' Provident Fund (EPF) Scheme for non-PAN cases in Budget 2023-24.

Gender analysis of the data showed that enrolment of net female members in EPFO stood at 406,000 in July, up by 34.84% year-on-year. (File Photo)
Gender analysis of the data showed that enrolment of net female members in EPFO stood at 406,000 in July, up by 34.84% year-on-year. (File Photo)

According to the Income Tax rule, if money is withdrawn from the EPF account before the completion of five years of the account opening, the whole withdrawal amount would remain taxable and PF contribution above 2.5 lakh per annum would also remain taxable.

Hindustan Times - your fastest source for breaking news! Read now.

Read here: Finance Secretary defends higher investment limit in saving schemes, says…

Sitharaman in her budget speech said, "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 reduce it to 20 per cent, as in other non-PAN cases."

In simple words, PF withdrawal would incur taxes if the withdrawal is done before five years of account opening, while if the Individual's PF account is linked with his/her PAN card, then no tax would be levied on the amount, explained a Mint report citing Balawant Jain, a Mumbai-based tax expert.

While filing the Income Tax Return (ITR) for that year, the withdrawal amount would be added to the total taxable income for that particular year and according to the applicable income tax slab, the tax would be levied on the individual, he further explained.

Read here: Number theory: Understanding the Union Budget’s tax calculations

However, if the PF account is not seeded with the PAN card, the applicable TDS would be deducted from the net amount available in the PF account.

Unlock a world of Benefits with HT! From insightful newsletters to real-time news alerts and a personalized news feed – it's all here, just a click away!- Login Now!
Stay informed on Business News along with Gold Rates Today, India News and other related updates on Hindustan Times Website and APPs
SHARE THIS ARTICLE ON
Share this article
SHARE
Story Saved
Live Score
OPEN APP
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Friday, March 29, 2024
Start 14 Days Free Trial Subscribe Now
Follow Us On