- Shishir Agarwal
Let's start with the investments that fall under Section 80C.
- Provident Fund
- Public Provident Fund
- Life insurance premium
- Pension plans
- Equity Linked Saving Schemes of mutual funds
- National Savings Certificate
Besides these investments, the payments towards the principal amount of your home loan are also eligible for an income deduction.
Your PF contribution is covered under the Rs 1,00,000 limit of Section 80C, provided it is made to a recognised provident fund. To better understand Section 80C, read All about Section 80C.
In your case, the taxable salary would mean total basic salary of Rs 4,80,000. The taxability of SAF/ Gratuity would be based on the exemption rules only at the time of retiring/ resigning, which is when you will avail of this amount.
Ever since joining my first employer in 1996, I have not withdrawn my Provident Fund.
During this time, I have worked at three difference places and even took a study break for two years. Each time, I transferred the PF amount to the new account.
Though I have not completed five years of service in the current firm, can I withdraw from my PF account for the construction of a home?
Currently, I have not got the confirmation of transfer of my PF account from my last employer (Mumbai-based) to the current employer (Bangalore-based). Must I wait for this to happen before applying through Form 31?
- Rupesh Mohan
The period of continuous employment of five years is to construed to mean the following:
"If the individual has rendered continuous service with his employer for a period of five years or more. If accumulated balance includes any amount transferred from his individual account in any other recognised provident fund(s) maintained by his former employer(s), then, in computing the period of five years, the period(s) for which the employee rendered continuous service to his former employer(s) is also to be included."
Considering the facts provided by you, you have completed five years of continuous service.
As regards withdrawal, if you have submitted the forms for transfer then withdrawal is not possible unless you again shift jobs.
However, you could definitely make an application for availing of a loan from your PF account for the purpose mentioned by you.
The follow-up on transfer can definitely be done with the Bangalore office, but you could request your company PF consultant to take up your matter.
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