is pf withdrawal taxable?
This is the most frequent question many people have, the answer is:it depends on two main things
- how long you have worked,
- reason for withdrawal.
If you have worked continuously for 5 years or more your withdrawal is not taxable.
If you take out your PF before completing 5 years, then the money is treated like your salary income and taxed accordingly.
Your own contribution is not taxed (since you already paid tax on your salary), but the interest earned on your contribution is taxable.
If the withdrawal amount is ₹50,000 or more before 5 years, then EPFO will deduct 10% TDS at the time of payment (if you provide PAN).
If you don’t provide PAN, TDS can be as high as 34.608%
You can claim a refund while filing ITR if your total income is below the taxable limit.