Information about EPF withdrawal is also to be given in the income tax return form. Even if there is no tax liability on EPF withdrawal, you have to give this information. If you do not do this, the Income Tax Department can impose a penalty.
If you have also withdrawn money from your Employees’ Provident Fund in the financial year 2020-21, then this information will have to be given in the income tax return. Even if the amount withdrawn by you does not come under the tax net, it will still have to be reported at the time of filing ITR. Experts say that information about the money withdrawn from PF under Schedule EI will have to be given in the income tax return form.
Tax experts say that this will help the tax officers to know what your income has been in the given assessment year and how you have spent it. In such a situation, it is advised that at the time of filing ITR, information about the amount withdrawn from EPF should also be given. If you do not do this, then a penalty can also be imposed on you for not giving correct information or giving wrong information to the tax department.
EPFO had given permission to withdraw PF advance
The Employees’ Provident Fund Organization (EPFO) once again allowed its members to withdraw the non-refundable Kovid-19 advance even amidst the second wave of the corona virus epidemic. That is, if an EPFO subscriber needs money, then they can withdraw money from their PF as Kovid-19 advance. Under this arrangement, EPFO has also put certain conditions.
Subscribers can withdraw their basic salary and dearness allowance for three months or 75 per cent of the PF corpus. Whichever amount is less, they will be allowed to withdraw that amount. If a member wants to withdraw less than this, then they will be allowed to do so.
Tax has to be paid on withdrawal from EPF account
Subscribers can claim ‘advance’ withdrawal on the Unified Portal of EPFO. After the claim is made by the employees, it is forwarded to the employer/company. Once it is approved, then the claim amount is transferred to the subscriber’s bank account. In some cases, tax is exempted on the claim amount, while in some cases tax has to be paid on it.
Who has to pay tax on EPF withdrawal and when
If a person withdraws money from EPF after completing five years of service, then he does not have to pay any tax on it. But, if money is withdrawn from EPF after having less than 5 years of service, then tax may have to be paid on it.
However, if this money is withdrawn due to any medical emergency or job loss, then it is exempted from tax. Even if a person does not serve for 5 consecutive years and serves again after some time, then tax will have to be paid on EPF withdrawal.
