I retired in February 2019. I obtained the ultimate cost of EPF on 11 July 2019. Will the ultimate cost of EPF be taxable?
The interval of service is a crucial issue. If you have got accomplished a steady interval of service for 5 years and extra, then the maturity proceeds obtained are tax-free in your arms. Also, what’s vital is the interval of holding, i.e., the corpus standing at the top of your retirement date is the tax-free corpus. The curiosity earned on the corpus put up no energetic contribution is taxable in your arms as per your marginal rate of tax. This implies that post-retirement there being no contribution, the curiosity accrued is taxable, i.e., March 2019 curiosity is taxable within the revenue tax return of FY19.
I’m working in a PSU and now we have solely NPS. In my earlier job, I used to be lined in EPF and I labored there just for three years, which means I must pay tax for withdrawal. But every time I submit the declare kind, I get an error message saying “the title within the EPF doesn’t match with the title within the revenue tax database” and because of this, I may have to pay around 33% of the amount as tax if I submit the request since the withdrawal amount is greater than ₹50,000. What do I do to get the quantity claimed by paying TDS of 10% solely?
You must examine your title within the information of your earlier employer and your PAN card as that’s the document holder within the revenue tax database. In case there is no such thing as a distinction between the 2, then observe up with your earlier employer. In the occasion of any distinction within the title, you could get it rectified at one of the 2 locations in order that it matches for ease of withdrawal. However, this will not change the tax rate relevant.
As your steady interval of service is lower than 5 years, the PF is taxable at your marginal rate of tax.
Surya Bhatia is the managing companion of Asset Managers. Queries and views at [email protected]