Cite.Co is a repository of information created by your industry peers and experienced seniors sharing their experience and insights.
Join Us and help by adding your inputs. Contributions From Other Members Follow Below...
Dear Sir I just quit my job and applied for withdrawal of PF from the trust. The authorities have deducted 30% Tax. Is that right? Please let me know the right process. Regards
HI

Case-I

If the continuous Service for more than 5 Years: TDS should be NIL

Case-II

If the continuous Service for less than 5 Years, all contribution made should be treated as made to the unrecognized PF & thus taxability is as follows:

a) Employee's Own Contribution, is exempt from tax but deduction u/s 80C/80L taken earlier should be disallowed, thus need to take effect of the benefit taken earlier & declare income accordingly.

b) Interest on Employee Contribution: Taxable under the head Income from other Sources.

c) Employer Contribution & Interest thereon: Taxable under the head "Salaries".

Trustee may ask for form 16 from the employee for all the year worked & re-calculate the Income & tax thereon.

In your case if you come in higher tax bracket for all the period served that effectively tax rate used by your company’s trust is correct.

Sometime trustee follow the policy to deduct tax at maximum rate ,in order to avoid lengthy calculation & so much trouble & than you have to claim refund by filling of return, & there is nothing wrong in this practice of your employer.

Hope this clarify your doubt.

This discussion thread is closed. If you want to continue this discussion or have a follow up question, please post it on the network.
Add the url of this thread if you want to cite this discussion.






About Us Advertise Contact Us
Privacy Policy Disclaimer Terms Of Service



All rights reserved @ 2020 Cite.Co™