MM Joshi 17 July 2017

Income from pf vs fd

Dear Sir, Just want to confirm on Income tax purpose.

I have service in a organization for 4.2 years and withdrawal of my PF on before 5 years, then I have made a FD for this amount for one year Now I want to know is the total PF withdrawal amount + FD interest will be taxable. ?? like I have deposit (FD) 175000 + get interest 14000/- then both amount will be taxable.

I am in dilemma please suggest. My accountant saying that 175000 + interest received is showing in form 26AS so the all total will be taxable.

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Rama chary Rachakonda (Secunderabad/Highcourt practice watsapp no.9989324294 ) 17 July 2017

If the employee withdraws the EPF balance before completing 5 yrs of service, then EPF balance is taxable.TDS on EPF will be deducted, if withdrawal is more than Rs 50,000. This is applicable from June 2016.Earlier this limit was Rs 30,000.

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(Guest)

Yes, it is taxable as you have withdrawn it before completing 5 years of service. However, if this is NOT your first job and if you had any PF from previous organisation which was transferred to the current organisation then it is not taxed. However, the total duration must be 5 years altogether.

FD Interest earned is offcourse Taxable in the Tax bracket whichever you fall into.

For EPF there is an excellent article. Please refer https://blog.cleartax.in/withdrawals-epf-taxed/

Regards

Rajesh