PF Withdrawal Rules - Avoid Heavy Tax

Written By: Danish

Withdrawing EPF before 5 years of continuous service attracts up to 30% tax. Early withdrawals can significantly reduce your retirement savings.

Warning

Complete 5 years of employment for tax-free withdrawals under Section 10(12). Job changes break continuity - transfer PF instead of withdrawing.

Year Rule

Withdraw tax-free for medical emergencies, company closures, or layoffs. Retirement withdrawals after 5 years are completely tax-exempt.

Tax-Free Cases

Avoid withdrawing before 5 years, forgetting PAN submission, or assuming Form 15G/H always prevents TDS. These errors cost heavily in taxes.

Common Mistakes

Transfer PF when changing jobs to maintain 5-year continuity. Make partial withdrawals for home/education needs which are often tax-free.

Smart Strategies

Submit Form 15G/H if income is below taxable limit. Withdraw in low-income years to minimize tax impact on your PF savings.

TDS Tips

Keep job records and withdrawal reasons documented. Consult EPFO portal or tax expert before withdrawing to maximize your savings.

Preparation

Urgent: Complete Ration Card e-KYC Before June 30