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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
From India , Calcutta


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


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.

From Singapore , Singapore
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