Are you an EPF member and feature-changed jobs? If so, switch your old EPF balance to the new account with the modern-day business enterprise. Though the Universal Account Number (UAN) stays identical across EPF bills, remember that having an equal UAN isn’t similar to a balance switch. The earnings tax policies governing the Employees’ Provident Fund (EPF) read with the Income Tax Appellate Tribunal…
(IT) choice in ACIT as opposed to Rajnrekar in November 2017 makes it compulsory to merge old EPF money owed into your cutting-edge EPF account or face tax implications. EPF is an obligatory deduction for personnel operating in corporations with 20 or more people. Here, 12% of your essential profits and dearness allowance is contributed via the company, and deducts another 12%the business enterprise deducts another 12%the business enterprise deducts another 12% from your earnings and brought to your EPF account. The new organization opens a new EPF account when you turn jobs. If you overlook transferring the balance accumulated within the old account into the brand-new one, it may increase your average tax liability.
Tax implications
An EPF account with a business enterprise becomes inoperative after you leave the process. However, the account keeps earning hobby, which’s taxable, in keeping with the ITAT selection in ACIT as opposed to the Dandekar case because you’ve left the process. If you have taken a ruin from paintings, come to be self-employed, or joined a non-EPF-blanketed company, you’re technically “no longer employed” for the functions of EPF. In this scenario, the interest which accrues every year into your vintage
EPF account becomes taxable even if you no longer withdraw any money from the account. If you join a new organization blanketed through EPF, the latest business enterprise opens another EPF account. Since you are hired for EPF, the hobby in this new EPF account isn’t taxable. And if you switch the balance from your antique EPF account to this one, the interest on the earlier corpus may even become tax-unfastened.
