Now PF Withdrawal Is Taxable From June-15.

From 1st June 2015, EPFO will deduct TDS on PF withdrawals when accumulations are over Rs 30,000 and the employee has worked less than five years. However, the body will not deduct TDS where the payment is less than Rs 30,000 but the member has rendered service of less than 5 years.

Thank you for your attention to this matter.

Those who save in PF should allow the amount to grow, instead of withdrawing at the time of job change.

This link for TOI makes good reading: [Employees should transfer their dormant PF accounts - The Times of India](http://timesofindia.indiatimes.com/city/mumbai/Employees-should-transfer-their-dormant-PF-accounts/articleshow/47423796.cms)

Purpose is to bring more people into the database of taxpayers. If TDS is deducted, the person will have to file an income tax return to get a refund if due. Also, IT monitors cases where TDS is deducted and no income tax return is filed subsequently by the concerned person. PF accumulations should be left to remain to grow. This is one investment where you get compound interest of 8.7% along with tax benefits. When you change jobs, always shift PF to a new PF account. However, it is now better to apply for UAN. Refer to this link for some information about UAN: [Universal Account Number (UAN): How to Get, Benefits, Withdrawal - AllOnMoney](http://www.allonmoney.com/provident-fund/universal-account-number-uan-for-pf/)

I personally would go so far as to say, even if you are saving the maximum in EPF, open a PPF account in SBI and start saving. You get 8.7% interest in this year, and all income is tax-free. Capital when drawn and interest are all tax-free. Even if you do not get an IT rebate, it is a worthwhile investment. The only thing is that the investment is for 15 years.

An advantage with PPF is that the minimum contribution is Rs500 per year, and as a planned saving strategy, one can deposit some small sums of money - like tour expenses claims, etc. - round it off, and deposit it in PPF. Slowly, it will grow into a tidy sum.

Most of the other investments are taxable. For example, FD gives you, say, 9%, but after tax, it is more like 6%, which is lower than inflation itself. Before one jumps into the stock market, all these fixed-income savings must be tried out. Even ELSS is a good investment - go for 5-star rated funds.

There are varied avenues of nearly risk-free investments, so go ahead, diversify, and invest from your first salary itself. Hopefully, you can retire with a good nest egg, taking future price increases/inflation in mind.

Health cover is another area where there is a need for careful planning. Cover yourself and your family with adequate health cover as a normal routine. Sufficient insurance cover for earning members is a wise investment.