Employees Provident Fund Organisation (EPFO) asked to deduct tax on all withdrawals by workers with less than five years of PF savings by I-T department

The I-T Department asks EPFO to deduct tax on all withdrawals by workers with less than five years of PF savings by the I-T department. EPFO has never levied any tax on such withdrawals, though as per the provisions, there is a lock-in-period of five years for PF savings. As per EPFO, they are of a view that as the statutory salary limit for EPF is Rs. 6500 pm, individuals whose salary is less than this taxable limit cannot be subjected to tax. Employers who run their own PF trusts already deduct tax on such premature withdrawals.

[Source: The Economic Times]