Provident Fund Withdrawal: When TDS, When No TDS ..!


The Finance Act 2015 has Inserted a new section 192A regarding the Tax Deducted at Source (TDS) on payment of accumulated provident fund (PF) balance due to an employee, The provision shall take effect from July 1, 2015 (01.06.2015) 




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Where the accumulated balance due & becoming payable to an employee participation in a recognised provident fund maintained by his / her employer includes any amount transferred from his/her individual account In any other recognised provident fund or / funds maintained by his/her former employer or employers, then, 'in computing the period of continuous service for the purposes of clause

(I) or clause (Ii) the period or periods for which such employee rendered continuous service under his former employer or employers aforesaid shall be included. 

Provisions related to TDS on withdrawal from Employee Provident fund Scheme, 1952
No TDS in respect of the following Five cases:-

(1)Transfer of PF from one account to another PF account.

(2)Termination of service due to ill health of member / discontinuation of Business by employer / completion of project / other cause beyond the contra of member.

(3) If employee withdraws FF after a period of 5 year

(4) If PF payment is less than Rs, 30,001. But,  the member has rendered service of less than 5 (Five) years.

(5) If employee withdraws amount more than or equal to Rs. 30,000 with service less than 5 years but submits Form 15H/ 15G along with their PAN

TDS will be deducted in respect of the following 2 cases:

If employee withdraws amount more than or equal to Rs. 30,000, with service less than 5 years, then

(a) TDS will be deduced kb 10% if Form-15G/15H Is not submitted provided PAN is submitted.

(b) TDS will be deducted at maximum marginal rate (ie. 34.608%) if employee fails to submit PAN.

Important Five Notes:

(1) TDS Is deductible at the time of payment.

(2) Its will be deducted under Section 192A of  Income Tax Act, 1951.

(3) Form 15H is for senior citizens (60 years and above) and Form 15G is for individuals having no taxable income Form 15G and 15H are self declaration and may be accepted as such in duplicate.

(4) PF Members must quote PAN in Form No.- 15G or 15H 

(5) Form No 15G and 15H can not be accepted if amount of withdrawal is more than Rs. 2.5 Lac and Rs. 3 Lac respectively





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