Tax Deduction on PF
Provident fund refers to the contribution of money both employee and employer in the form of monthly salary deduction.When you start working in an organization, you and your employer both contribute 12% of your basic salary (plus dearness allowances, if any) into your EPF 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.
No TDS in respect of the following cases
- Transfer of PF from one account to another PF account.
- Termination of service due to ill health of member/discontinuation of Business by employer/completion of project/other cause beyond the control of member.
- If employee withdraws PF after a period of five year.
- If PF payment is less than Rs. 30,000/- but the member has rendered service of less than 5 years.
- If employee withdraws amount more than or equal to Rs. 30,000/-, with service less than 5 years but submits Form 15G/ 15H along with their PAN.
TDS will be deducted in respect of the following cases
If employee withdraws amount more than or equal to Rs. 30000/-, with service less than 5 years, then
- TDS will be deducted @ 10% if Form-15G/15H is not submitted provided PAN is submitted.
- TDS will be deducted @ maximum marginal rate (i:e. 34.608%) if employee fails to submit PAN.
- TDS is deductible at the time of payment.
- TDS will be deducted under Section 192A of Income Tax Act, 1961.
- Form 15H is for senior citizens (60 years & above) and Form 15G is for individuals having no taxable income. Form 15G &15H are self-declarations and may be accepted as such in duplicate.
- Members must quote PAN in Form No.- 15G / 15H and in Form No. 19