Team-BHP - The "Provident Fund" Thread

Quote:

Originally Posted by given2fly (Post 995258)

Are you sure about 30% tax (TDS?). Because I am about to withdraw the PF lying with my old firm and I haven't heard from anyone this tax being applicable.

Quote:

Originally Posted by hemanthisgreat (Post 995263)

As far as i have heard, provident fund is not taxable.

Withdrawals are not taxed if your account has bee receiving deposits for 5 years or more.

Otherwise TDS is applicable.

Save prudently through provident fund-The Times of India

On top of it, employee loses Gratuity account if job switch happens before completing 5 years in organization.

However, if withdrawal is due to layoff then no tax is applicable. (Company has to do paperwork with govt for any layoff as per Industry act).

PF a/c if withdrawn before 5 years

- Interest component will be taxed as income

- Tax rebates given earlier will be also be withdrawn (i.e; they will deduct the tax rebate one gets every year on PF savings)

It happend to my cousin in 2000 when he left for USA after working for 2 years. I have got it processed. they deducted all these

Quote:

Originally Posted by NetfreakBombay (Post 995497)

In case of lay-off, are gratuity and notice-money taxable? And how is gratuity calculated?

\N

Quote:

Originally Posted by ntomer (Post 995746)

In case of lay-off, are gratuity and notice-money taxable? And how is gratuity calculated?

Gratuity is half month's pay for each year you work at firm. And this amount gets some interest every year.

No idea about tax, hope someone from financial background can answer these.

Quote:

Originally Posted by NetfreakBombay (Post 995823)

Gratuity is half month's pay for each year you work at firm. And this amount gets some interest every year.

No idea about tax, hope someone from financial background can answer these.

Is gratuity calculated against basic salary or total salary?

No I have not been laid-off yet, but in these times, it won't do any harm to know how much I stand to get in case of some eventuality ;-)

\N

Ntomer: First, Gratuity is paid to the employees who have worked more than 5 years in that particular company (or as per company rules). Gratuity is taxable. TDS will be deducted if you w/d now. It will calculated be on basic salary.

Yes its not completly tax free. As per income tax site, gratuity up to a limit is tax free ( max 3.5 lakh ).

Blurrb:

Quote:

Any death cum retirement gratuity received by Government or Local Authority employees is exempt from tax. For Non-Government Employees the taxability depends on whether Gratuity is covered under the Gratuity Act

A) Gratuity covered under the Gratuity Act

For Gratuity covered under the Gratuity Act, total of gratuity received by an employee, covered by the Gratuity Act, from various employers in whole of service is exempt from tax to the extent of least of the following three amounts:

* 15 days' salary, based on the last drawn salary, for each completed year of service
* Rs. 3,50,000/-; or
* The gratuity actually received.

B) Gratuity not covered under the Gratuity Act

For Gratuity not covered under the Gratuity Act any gratuity not covered by the Gratuity Act, is exempt from tax to the extent of least of the three amounts

* The half month's salary for each completed year of service; or
* Rs.3,50,000/-; or
* The gratuity actually received.

Income Tax India

Quote:

Originally Posted by spadival (Post 995268)

Where did you submit all this? at the company or did you send it to the PF authority? I need to do the same shortly and I have all of the stuff ready with me - tickets and visa.

It was submitted to my company's payroll dept. who took their own sweet time(40 days+) to forward it to the govt. red tape queue. God knows where it is now. One of my friends got his PF after 6 months of waiting.

Q1. If I withdraw PF before 5 years, its taxable. Is it Tax deducted at source (TDS) or do you get the full money and you have to pay the tax and file it in one's returns?

Q2. Any way of finding out the status of the PF withdrawal? If one has applied for it, any way of tracking it? Will a visit to the PF office help??

Quote:

Originally Posted by csentil (Post 1192365)

Q1. If I withdraw PF before 5 years, its taxable. Is it Tax deducted at source (TDS) or do you get the full money and you have to pay the tax and file it in one's returns?

Yes tax is is deducted before final payment.

In some cases its usually cheaper to take a personal loan at rate of 15 - 20% (and wait for 5 years to get over) then give away 30% + cess on PF.

Quote:

Originally Posted by csentil (Post 1192365)

Q2. Any way of finding out the status of the PF withdrawal? If one has applied for it, any way of tracking it? Will a visit to the PF office help??

RTI is sure fire way. Personal visit helps a lot.

Usually if you file a RTI (asking for timelines not reasons for delay), they will hurry up the things.

Or you can pay 2k to some broker to get things done.

Whats the minimum period before you can withdraw PF ? A friend was let go from his company after 5 months and was told that it is only possible to get PF after completing 6 months of service and as of now its not even transferrable to another company.

Was the PF maintained in EPFO (govt account) or was it maintained by a private trust managed by company?

Does he have the PF account number with him? If yes than he can request an account statement or pay 5 - 600 to any CA who would be able to get a printout of account showing actual credits.

If company has not deposited the PF than its a criminal case.

Is it possible to take a PF advance, for example to buy a house? If yes, after how many years, and also how does it work? Does one have to be in the same company, or is it the overall experience which is considered?

Thanks in advance, guys.