which slab will be applicable if withdrawn after retirement?

[rajeshrajdaan]

I have invested more than 2.5 lk and my epfo pass book shows some taxes also. (epfo is around 20 years old)

q1) are they cutting the tax now? i do not think so, I think they will cut after with drawal to my bank account?

q2) and if they cut after withdrawal, what slab would they apply, I think after retirement as there will not be any income , so it will be in 5% or 10% so they should cut accordingly.

q3) Does EPFO pay any interest if the guy is not earnning for more than 3 years and still holding the epfo?

 

[TaxWiser]

I have invested more than 2.5 lk and my epfo pass book shows some taxes also. (epfo is around 20 years old)

q1) are they cutting the tax now? i do not think so, I think they will cut after with drawal to my bank account?

q2) and if they cut after withdrawal, what slab would they apply, I think after retirement as there will not be any income , so it will be in 5% or 10% so they should cut accordingly.

q3) Does EPFO pay any interest if the guy is not earnning for more than 3 years and still holding the epfo?

Hey there! Let's break down your queries one by one:

Q1: Are they cutting the tax now?
Nope, the tax isn't being deducted now. Taxes on EPF are typically applied at the time of withdrawal. So, you're right in thinking that the tax will be deducted when you withdraw the amount to your bank account.

Q2: What tax slab would apply after withdrawal?
The tax slab applied will depend on your total income in the financial year of withdrawal. If you withdraw after retirement and have no other income, you might fall into the lower tax slabs (5% or 10%). However, the exact slab will depend on the total taxable income for that year.

Q3: Does EPFO pay any interest if the account holder is not earning for more than 3 years?
Yes, EPFO continues to pay interest on the EPF balance even if the account holder is not earning for more than 3 years. However, if the account remains inactive for more than 3 years, the interest earned may become taxable.

 

[rajeshrajdaan]

Hey there! Let's break down your queries one by one:

Q1: Are they cutting the tax now?
Nope, the tax isn't being deducted now. Taxes on EPF are typically applied at the time of withdrawal. So, you're right in thinking that the tax will be deducted when you withdraw the amount to your bank account.

Q2: What tax slab would apply after withdrawal?
The tax slab applied will depend on your total income in the financial year of withdrawal. If you withdraw after retirement and have no other income, you might fall into the lower tax slabs (5% or 10%). However, the exact slab will depend on the total taxable income for that year.

Q3: Does EPFO pay any interest if the account holder is not earning for more than 3 years?
Yes, EPFO continues to pay interest on the EPF balance even if the account holder is not earning for more than 3 years. However, if the account remains inactive for more than 3 years, the interest earned may become taxable.

what is the inactive account? if one is not earning he and the employer are not going to put money in it. so pls tell me the criteria.

 

[TaxWiser]

what is the inactive account? if one is not earning he and the employer are not going to put money in it. so pls tell me the criteria.

An EPF account becomes inactive if there are no contributions (from either the employee or the employer) for a continuous period of 36 months (3 years). This typically happens when someone stops working and no longer has an employer contributing to their EPF account.

Key Points:

• Inactive Account: No contributions for 36 months.
• Interest: EPFO continues to pay interest on the balance even if the account is inactive. However, the interest earned on an inactive account may become taxable.
• Withdrawal: You can still withdraw the balance from an inactive account, but it might be subject to taxes based on your total income in the year of withdrawal.