None of us can deny from the fact that how far an Employee Provident Fund plays an important role in our life. Logically, EPF is the most important part of the individual’s salary and plays major role in building the sufficient retirement accumulation. It signifies the effort of an employee who has dedicatedly devoted his life towards the employment. But what if his saving has become curse on him? Yes, ‘CURSE’! Can you believe the situation how one feels when his lifetime saving gets vacuumed by someone. The same is going to be effective from 1st June 2015 with the implementation of The Finance Act 2015 under the section 192A. The law has been passed regarding the accumulation of the provident fund balance of an employee.
With the next month onwards, if an employee wish to withdrawal his/her PF with work history less than five years with an accumulation of over Rs 30,000 as PF amount, the EPFO will deduct tax at source. The TDS will be deducted at the rate of 10% with the required submission of PAN number.
The TDS deduction will not be applicable to those members who submit the form 15G and 15H. 15G is submitted by the claimants below age group of 60 years, while, 15H will be submitted by senior citizens of above 60 years. These forms are submitted just to declare that their income wouldn’t be taxable after receiving the payment.
If a member fails to submit PAN details, forms 15G and 15H, he will be deducted with the TDS at the maximum marginal rate of 34.608%.
On the other hand, TDS deduction is not applicable in following cases:
- Transfer of PF from one account to another account.
- If employee is terminated due to discontinuation or ill health.
- If employee withdraws PF after a period of five years of his continuous service.
- If the payment is less than 30,000 but has concluded service less than 5 years.
- If employee withdraws more than or equal to Rs 30,000 with service less than 5 years but has submitted PAN along with 15G and 15H form.
Featured Image Caption:- PF – TDS | Photo Credit : economictimes.indiatimes.com
Do you enjoy writing and have something interesting to share?
You are at the right place. Inspiring MeMe is the world's fastest growing platform to share articles and opinions. We are currently accepting articles, blogs, personal experiences & tips and would love to have you onboard.