Premature withdrawal from NPS and PF

[raksrules]

I am investing in NPS and current corpus is well below 5L. I read that one can withdraw entire amount if it is under 5L. Is it tax free?

I also invest in PF and VPF through my employer. My employer maintains the money in their trust and not with EPFO. I read requirements for premature withdrawal without one being unemployed (for more than 2 months). It says that one can do it for stuff like marriage, higher education and buying property.
Has anyone done this and how much is allowed to be withdrawn? Is that tax free too?

 

[Rayman]

I am afraid no one but a CA can answer your tax questions since it is very vague. Both NPS and EPF don't have clear directives for premature withdrawals. I think EPF is tax free after certain years but not sure.
Yes you can withdraw a certain % from EPF provided that your details recorded in EPF is correct. I have done it for medical emergency and house construction and both were processed without any hassle and within 1 to 2 weeks. I am sure I am pretty lucky considering the horror stories in internet. Each withdrawal reason has its own rules. Read up on that.

 

[technofast]

I don't know about NPS but for EPF I recently submitted for a withdrawal of 10 lakhs for house construction but got only 4.5 lakhs. I am not sure how they arrive at the calculation of this amount. However, it was all online and got the amount credited to the bank account within 2 weeks.

 

[Swaroop M]

I am investing in NPS and current corpus is well below 5L. I read that one can withdraw entire amount if it is under 5L. Is it tax free?

Hey
Premature withdrawals are only permitted after 5 years of subscription of NPS
And if it is satisfied you can withdraw entire amount as it is below five lakhs
However income tax is only exempt on 20% of withdrawal and remaining 80% is taxable

I also invest in PF and VPF through my employer. My employer maintains the money in their trust and not with EPFO. I read requirements for premature withdrawal without one being unemployed (for more than 2 months). It says that one can do it for stuff like marriage, higher education and buying property.
Has anyone done this and how much is allowed to be withdrawn? Is that tax free too?

For PF withdrawal (assuming it is unrecognised)
Employer's contribution and interest on employer's contribute is taxable as salary
Employee's contribution is exempt provided that deduction under section 80c not claimed earlier
And interest on employee's contribution is taxable as other source


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[TechUser00]

I am investing in NPS and current corpus is well below 5L. I read that one can withdraw entire amount if it is under 5L. Is it tax free?

I also invest in PF and VPF through my employer. My employer maintains the money in their trust and not with EPFO. I read requirements for premature withdrawal without one being unemployed (for more than 2 months). It says that one can do it for stuff like marriage, higher education and buying property.
Has anyone done this and how much is allowed to be withdrawn? Is that tax free too?

For PF and VPF under only certain conditions Permanent Withdrawal is possible under marriage, etc. Other than that Refundable Withdrawal is allowed ( You have to pay it back in EMI with interest)
You have to explore the options available from the employer.
Not a large sum can be withdrawn from PF if you didn't contribute yourself as VPF.

 

[t3chg33k]

Since your VPF is being handled by a company trust, it is exempted from EPFO regulations and is probably the easiest option in terms of process to withdraw from after discussion with HR, but the tax treatment is not different from normal PF.

Short version is that the non-interest employee contribution would be non-taxable.

Income Tax on EPF Withdrawal | PF Withdrawal Taxability

PF Withdrawal Taxability: EPF withdrawal is taxable under certain circumstances and exempt under certain circumstances. Read this article to know more about EPF withdrawal.

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