From a tax perspective, as per Section 10(12) read with Rule 8 of Part A of Fourth Schedule of the Income Tax Act, 1961, the accumulated PF balance due and payable to the employee is exempt from tax if he has rendered continuous service for a period of five years or more. Where there are multiple employers and the PF balances are transferred to the PF account with the most recent employer, the cumulative period of employment with all the employers is required to be seen for the purpose of evaluating whether the employee has rendered continuous service for a period of five years or more.
PF is tax-free if an employee has been in service for 5 yrs or more
