Tax On PF Withdrawal: Why You Must Merge Your Previous PF Account With New One

Many of us change jobs every 2-3 years to secure higher salaries and better opportunities. When you switch jobs, you provide your UAN to the new employer, who subsequently opens another PF account under the same UAN. It is essential to merge your previous PF account with the new one after opening the latter. Rule of PF withdrawal As per the regulations, if your tenure with a company is less than five years and the total deposit in your PF account is below Rs 50,000, you are exempted from paying any taxes upon withdrawal. Consequently, if you decide to withdraw funds from your PF account without merging, each company’s two-year duration will be treated individually, resulting in a 10 per cent TDS deduction for each.