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I am working currently in a PSU and we have only NPS. In my previous employment, I was covered under EPF and I worked there only for 3 years, meaning I would have to pay tax for withdrawal. But whenever I submitted the claim form, I got an error message “The Name in the EPF does not match with the name in the Income-tax database" and because of this, I may have to pay around 33% of the amount as tax if I submit the request since the withdrawal amount is greater than Rs.50000. What to do now to get the amount claimed by paying TDS of 10% only?

-- Name withheld on request

You need to get the name checked in your Provident Fund and your PAN card. If there is any discrepancy, then it needs to be rectified to ensure the name matches in both records. At the same time, the PF withdrawal is fully taxable as you have not completed five years of continuous service. And while it is understandable to get PF deducted at a lower tax rate, you are liable to pay the taxes as per your marginal rate of tax and the TDS even if deducted at 10% is to be reduced from your marginal rate of tax.

I wish to inform you that I retired in February 2019. I received the final payment of EPF on 11.7.2019. I just wish to enquire as to whether the final payment of EPF would be taxable? As I will file my income tax return for FY20.

-- Name withheld on request

In your case what is important is the period of continuous service i.e., if you have retired after completion of at least five years of continuous service and this will include any change in employment during the said period of five years then the full and final payment of PF will be considered as tax free.


Surya Bhatia is managing partner of Asset Managers. Queries and views at mintmoney@livemint.com

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