TAX ON EPF WITHDRAWALS

 

Sec. 192A of the Income Tax Act 1961 regulates the deduction of TDS on withdrawals from Employee Provident Fund (EPF).

TDS will be deducted in the following scenario:

If an employee withdraws an amount equal to or exceeding Rs. 50000 with less than 5 years of service TDS will be deducted @10% if FORM 15G/15H is not submitted, provided employee has submitted their pan. TDS will be deducted @ 20% if employee fails to submit their pan.

No TDS applicable in the following circumstances:

Ø  Transfer of provident fund from one account to another.

Ø  Termination of service due to the member ill health, discontinuation of business by the employer, completion of project or any other reason beyond the member’s control.

Ø  Withdrawal of PF after completing of five years of services.

Ø  If the PF withdrawals is less than Rs. 50000 and the member has served for less than five years.

Ø  If the employee withdraws Rs. 50000 or more with less than 5 years of services but submits FORM 15G/15H along with their PAN.