Withdrawing EFP as NRI and tax implications

- TDS rate would be 31.2% upto Rs. 50 lacs amount. Yes you have to file Form 15CA. 

- Fill Indian address 

- As you are NRI, rate of TDS is 10%+surcharge +cess (4%). It is not 31.2%. If the amount of PF withdrawal is less than 50 lacs then there is no surcharge. Net effective rate would be 10.4%. Individual slab tax rates would be applicable. You may opt for new tax rate regime.

- You can file Form 15G if the tax on the estimated total income of the previous year including PF withdrawal is NIL.

(i) Payment received in respect to employers contribution and interest thereon will be taxable under the head salaries. 

(ii) Payment received in respect to interest on employees contribution will be taxable under the head income from other sources.

(iii) Payment received in respect to employees contribution is NIL.

Please take phone consultation for detailed discussion.

Hi

You can fill indian address.

Rate of TDS would be 10.4%

Yes you need to file form 15CA.

Hi

Your EPF payout has 4 components.

a) Your contribution/employee’s contribution b) Interest on your/employee’s contribution c) Employers contribution and interest on employer’s contribution

a) Your contribution/Employee’s contribution – This is the amount contributed by you to your EPF. This portion of your withdrawal is not taxable. However, if you have claimed deduction under section 80C on your contribution in earlier years, you may have to pay additional tax as if 80C was not claimed by you for those years.

b) Interest on your/employee’s contribution – This portion is taxed as income from other sources.

c) Employer’s contribution and interest on employer’s contribution – Employer’s contribution and interest on it is fully taxable. It is taxed under the head salary in your tax return. When TDS is deducted on it, you are likely to see an entry under salary TDS in your Form 26AS for it.

For details discussion please have a phone consultation.

Hi,

Yes, the Pf will be taxable as per your slab rate because your service period is less than 5 years.

For withdrawal of PF, you need to contact someone who looks after PF compliances.

One solution for minimising the tax would be that if you have Pf in more than one account, then you can withdraw PF in parts and reduce your tax liability as you will be getting the benefit of extra slab rate if you do the Pf withdrawal in two ywars

Hi

As per the EPF scheme, para 72 on Payment of PF states that wherever the accumulation to the PF account of a person who has settled abroad permanenetly is not claimed within 36 months from the date it becomes payable, the PF account must become inoperative. In your case, 3 years have not elapsed from the info provided and you may claim the PF balance at the earliest because as per para 69, PF balance becomes payable immediately when a person moves abroad.

Furthermore, as per the Income Tax Act 1962, amount withdrawn from a recognized provident Fund is exempt from tax provided employee has served a continuous period of 5 years (including previous employer). In the present case, you worked for 4.5 years. Therefore, you do not qualify for exemption and the entire amount withdrawn becomes taxable. The RPF will be treated as unrecognized PF from the day contribution started. Employer's contribution and interest thereon will be treated as income from salary while employee's contribution is exempt unless it was claimed as deduction u/s 80C in previous years and the interest thereon is taxable as other income. The tax rates applicable on employee's contribution will be those applicable in the year of contribution to the RPF balance.

Also, u/s 192A of Income Tax Act 1962, if the amount withdrawn is more than or equal to 50,000, it will attract TDS @ 10% if PAN is furnished to the deductor. In the absence of PAN, 10% should be replaced by maximum marginal rate, which for an individual below 60 is currently 30% plus 4%cess. Further, current tax rates provide exemption to NRI for taxable income upto Rs.250000.

For your withdrawal query, may be you need Indian Bank Account for remittance of the PF amount. I need to check that.

Please seek any clarification. Happy to help.