Tax TDS Deduction On PF (Saving Tips)


Provident Fund (PF) of the employee is the fund which is made up of by the employer and employee together during the employment. Generally 12% of the basic salary of employee deposited to PF account and the same amount deposited by the employer. Withdrawal of Provident Fund from EPF account is not allowed while the employee is still employed. But in the case of emergency, Employee can withdraw the amount from their PF account.

An employee can withdraw this amount when they switched their job and don’t want to transfer Provident Fund (PF) account. There are provisions related to TDS when employee withdrawal from Employee Provident Fund.

In several cases, Employee’s will be exempted to pay the TDS on withdrawal of EPF amount from their account.

TDS-tax deduction on EPF-Withdrawal

TDS Exemption on EPF Provident Fund

  1. When employee transfer their old Provident Fund (PF) account to new PF account while switching the job.
  2. When employee discontinues his/her job due to Ill health.
  3. When the employer closed the business, the employee doesn’t have to pay TDS on their PF amount.
  4. If the employee is on the contractual basis or working on a project, there will be o TDS when employee withdraws the PF amount after completion of Contract/Project.
  5. When employee withdraws the PF amount after the completion of 05 years of their service.
  6. If employee don not completed the 05 years of service but withdraw the amount less than Rs.30,000 from PF account, there will be no TDS have to pay by the employee.
  7. If employee don not completed the 05 years of service but withdraw the amount equal to or more than Rs.30,000 from PF account and submits the 15G/15H form along with their 10 digit PAN (Permanent Account Number) details, there will be no TDS have to pay by the employee.

 

In several cases, Employee’s have to pay the TDS on withdrawal of EPF amount from their account.

  1. If employee don not completed the 05 years of service but withdraw the amount equal to or more than Rs.30,000 from PF account, then employee have to pay the TDS at 10% rate in the following cases.
    • Employee submits the details of PAN (Permanent Account Number) card.
    • The employee does not submit the 15G/ 15H Form.
  2. If employee don not completed the 05 years of service but withdraw the amount equal to or more than Rs.30,000 from PF account, then employee have to pay the TDS at a maximum marginal rate of 34.608% in case of Employee fails to submit the details of PAN (Permanent Account Number) card.

Note:

  • TDS will be deducted at the time of payment of PF amount under Section 192A of Income Tax Act, 1961.
  • Form 15H – Form 15H is for the Senior citizens of 60 years and above.
  • Form 15G – Form 15G is for the Individuals of below 60 years and have no Taxable income.
  • Form 15H/ 15G are self-declaration Forms.
  • The employee must provide the details of PAN (If available) in the Form 15H/ 15G and Form 19.

visit our Home EPF balance check, EPF withdrawal status, EPF forms download. PF Offices Address list.