Finance Gurus please help.
History:- I joined a Company in India in 2002. I also opted for PF(which was a company run trust). Made regular contributions till Mar2004. In Mar 2004 Company sent me of US. Since then I am in US. I never withdrew money before coming to US.
Present:- Due to PF law changes last year Company Run Trust closed. They created accounts for current employees in Govt PF. But they kept money in trust of those who were still employees but were transfered to US(hence not contributing)
Question:- This year considering more than 5 years are over I withdrew my balance. Now company has cut TDS on that(@20%) amount. I was under impression after 5 years there is no tax implication, but company accountant is saying the PF account needs to contributed for 5 contineus years to have NO TAX implications. Is this true? Anybody with similar experience?
Please help.
Tax on PF withdrawal
Tax on PF withdrawal
It is taxable, if you work for the employer less than 5 years. You will have to claim it back by filing the Tax returns.
In your case, as per the PF rule, you have NOT worked for 5 years continuosly for the indian employer. They do not consider working for US employer, even though the company name is same.
In your case, as per the PF rule, you have NOT worked for 5 years continuosly for the indian employer. They do not consider working for US employer, even though the company name is same.