In India, as a part of employment the employer and employees contribute to a fund called Provident Fund. It’s a savings and retirement fund that is typically established and contributed by the employer and the salaried employee. It’s a government backed initiative and an account is created with the PF department ( similar to a bank account) and a certain % of salary is transferred to the account by the employer and employee. The law mandates a minimum %.

The provident fund is different from a pension fund. These are tax exempt savings funds.

The employer contributions are exempt from taxes entirely and are earned during the course of employment in India.

If I’m a member of the PF fund for more than 5 years the withdrawals are also exempt from taxes as per the Indian Income Tax act.

Now, since my spouse and I are moving countries and don’t intend to work in India for the foreseeable future, we plan to close the PF account and withdraw the proceeds to our Indian bank account. We will initiate closure and withdrawal by the 1st of April. However due to the operation of law we will receive the proceeds in our bank accounts only after moving to Copenhagen.

Please note that this is income earned and deposited to an account in our names in India ( before moving to Copenhagen) and withdrawn in India. Only the receipt would happen post our move. And these funds are entirely exempt from taxes in India as per law.

I wanted to understand if there would be any tax implications in Denmark on these funds. Thanks in advance!

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The original was posted on /r/denmark by /u/rajeevist at 2024-03-27 06:12:20+00:00.