TDS is deducted on the EPF withdrawals within 5 years of the opening of the account.
At present the TDS rate on withdrawal of taxable components from Employees’ Provident Fund Scheme in non-PAN cases is 30%.
While presenting the Union Budget 2023 Finance Minister Nirmala Sitharaman announced a reduction in Tax Deducted at Source (TDS) rate on Employees’ Provident Fund (EPF) withdrawals for non-PAN cases.
Now, the government has reduced the TDS rate from 30% to 20% on the taxable portion of EPF withdrawal in non-PAN cases.
This reduction in tax deducted on withdrawals from EPF is expected to help the salaried individuals whose PAN has not been updated in the records of Employees Provident Fund Organisation (EPFO).
In the Budget speech, the finance minister had said, “At present the TDS rate on withdrawal of taxable components from Employees’ Provident Fund Scheme in non-PAN cases is 30%. It is proposed to reduce it to 20%, as in other non-PAN cases.”
Budget 2023 PDF Download: Here’s How To Access Budget Document, Speech Of FM Nirmala Sitharaman
Sometimes, tax for income of an earlier year is deducted later, while tax thereon has already been paid in the earlier year. Amendment was proposed to facilitate such taxpayers to claim credit for this TDS in the earlier year.
Higher TDS/TCS rate applies, if the recipient is a non-filer i.e. who has not furnished his return of income of preceding previous year and has aggregate of TDS and TCS of Rs 50,000 or more.
It is now proposed to exclude a person who is not required to furnish the return of income for such previous year and who is notified by the government.
Once the TDS is deducted by the EPFO, a certificate is issued to the taxpayer. While filing Income Tax Return (ITR) to claim refund if any, one needs to submit this TDS certificate.
Notably, Form 15H or Form 15G can be submitted by an EPF account holder to ensure that no TDS is deducted on the withdrawals from the EPF account.
Form 15G is applicable for individuals below 60 years of age and Form 15H is for above people who are 60 years or above.
TDS is deducted on the EPF withdrawals within 5 years of the opening of the account.
If the PAN is available with the EPFO, then the rate of TDS deduction is 10% when the withdrawal amount exceeds Rs 50,000. However, for such withdrawals where the PAN was not available/ linked to the PF account, the TDS rate was 30%, which is now reduced to 20%.
If you are planning to withdraw funds from your EPF account, and if the account is not linked with PAN, you have to wait till April 1, 2023, when the new provisions come into force in the new financial year.
Read all the Latest Business News here
For all the latest business News Click Here
