Employees Provident Fund Organisation
(Ministry of Labour, Govt. of India)
Bhavishya Nidhi Bhawan,
14- Bhikaji Came Place, New Delhi – 110066
No. WSU/6(1)2011/IT/Vol-IV/5931 Dated- 21.05.2015
To,
All Addl. CPFC (Zones)
All RPFC/OIC of ROs/SR0s.
Sub: Amendment in Section 192A of the IT Act, 1961- Instructions or deduction of TDS on withdrawal from PF.
Ref: Head Office circular of even number dated 16,03.2015.
Sir/Madam,
The Finance Act, 2015 (20 of 2015) has Inserted a new section 192A regarding the payment of accumulated provident fund balance due to an employee. The Provision Shall Take effect from 01st June 2015. A copy of the said provision is enclosed for information.
2. Income Tax should be deducted at source (TDS) at the following rates if at the time of payment of the accumulated PF balance is more than or equal to Rs. 30,000/-, with service of less than 5 years:-
a) TDS will be deducted at 10% provided PAN is submitted. In case Form No. 15G or 15H Is submitted by the member, then no TDS shall be deducted.
b) TDS will be deducted @ maximum marginal rate (i.e. 34.608%) if a member fails to submit PAN (and no Form No 15G or 15H).
3. TDS shall not be deducted 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/contraction of business by employer, completion of project or other cause beyond the control of the member.
- If employee Withdraws PF after a period of five years of continuous service, including service with former employer.
- 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. 30000/-, with service less than 5 years but submits Form 15G/1511 along with their PAN
A flow-chart is appended for understanding the implications of the amended provisions in the Income Tax Act. 1961.
4. Kindly take note that TDS is deductible at the time of payment of provident fund in Form No. 19. Form No. 15H is for senior citizens (60 years or more) while Form No. 15H is for individuals having no taxable income. Form 15G and 15H are self-declarations and may be accepted as such in duplicate. Form 15G and 15H may not be accepted if amount of withdrawal is more than Rs. 250000/- and Rs. 300000/- respectively. Members shall quote PAN in Form No. 15G/15H and in Form No. 19. The field offices may purchase pre-printed Form No. 15G & 15H to assist the members in filling up Form No. 19.
5. The process of authorization of Form No. 19 shall be as per the existing system. However, wherever TDS has to be deducted @ 10%, the same may be approved on Form No. 19 by the APFC (Accounts). Wherever TDS has to be deducted @ 34.608%, the same may be approved on Form No. 19 by a RPFC level officer. These instructions shall apply in initial stages of implementation of the amended income tax provisions. Since the members may not be aware of the new provisions, therefore it shall be responsibility of SSA (Accounts) to communicate the same to the member on telephone and record the same in Form No. 19 to submit PAN, Form No. 15G/15H, if applicable. A system generated statement of Tax Deducted at Source (TDS) may invariably be sent to the member.
6. Members who have tendered continuous service of 5 years or more, including service with former employer, shall not be required to submit PAN and Form No. 15G/15H along with Form No. 19. Similarly, members whose service has been terminated due to ill health, contraction or discontinuation of business of the employer or other causes beyond the control of the member, shall not be required to submit PAN, Form No. 15G/15H alongwith Form No. 19. In such cases, no income tax (TDS) shall be deducted in terms of Rule 8 of Fourth Schedule to the Income tax Act, 1961.
7. The field offices shall deposit the Tax Deducted at Source (TDS) and returns thereof by 7 th of the following month. The existing TAN number obtained the respective offices may be used to deposit tax to the local income tax authority. The in-house responsibility for deposit of tax and returns thereof shall lie with the Drawing and Disbursing Officer (DDO) as per the existing system. The concerned officers and staff may be given an in-house training for implementation of new provisions and RPFCs may engage CAs, who are on our panel.
8. The above should be made applicable with effect from 01-06-2015 and all steps should be taken before hand such as procuring copies of Form No. 15G and 15H. In case of any clarification, the same may be escalated to the head Office.
Yours faithfully
(Sanjay Kumar)
FA&CAO
– See more at: http://abcaus.in/epfo-circular/tds-deduction-on-pf-accumulated-balance-payment-withdrawals-from-01-06-2015.html#sthash.nMl2aLYg.dpuf
Download Full Text of the Notification with extract of Related Rules
Hi,
I hv served 4.5 years in private company.
Now at time of pf withdrawal which is less than 5 years, company cutting tds @20% +4% cess which is around 80k so can i claim tds in filing itr.
My LWD was 31-03-2020.
I do have the same question Shailesh.
Please post your comment if you have any update.
I served 4 years 6 months in my previous company. If I withdraw my PF after PF after 5 years, will my PF money be eligible for PF deduction?
After leaving first company, I did not join any other company in India.
All the comments show the poor understanding of people …..i am sad to see how people dont understand and start cribbing on their own stupid assumptions …if you read carefully , nothing has changed…sad to see the low IQ of citizens in this country
what about girls who got married and leaving job before 5 years. One way government is preaching for women, other side doing such restrictions. A single money is valuable for girls who starts their family life. or blow clause is applicable for them
Similarly, members whose service has been terminated due to ill health, contraction or discontinuation of business of the employer or other causes beyond the control of the member, shall not be required to submit PAN, Form No. 15G/15H alongwith Form No. 19. In such cases, no income tax (TDS) shall be deducted in terms of Rule 8 of Fourth Schedule to the Income tax Act, 1961. – See more at: https://taxguru.in/income-tax/tds-withdrawal-pf-wef-1st-june-2015.html#sthash.aNyTQehz.dpuf
TDS was wrongly deducted by EPFO Khandivali Office even though I have more than 15 years experience. TDS deducted is NOT reflecting in my 26AS Statement. PF office is asking me to claim it from IT Dept next yr.
How do i go about claiming the fund which is neither in PF Dept nor with IT Dept ??
PF office says they will not give interest for the TDS amount wrongly deducted – since its already a closed account for them. Will IT Dept give interest for the foregone period ?
Has this problem happened to anyone else before with any of the other EPFO offices ? How did they reverse the amount from EPF office without going through IT Dept ? Viewers please share your experience.
hello sir
if pan card was submitted without form no. 15G so how much tds will be dudect.
Dear sir,
Who made the rule ! who are following the rules,there so many people around the wolrd are breaking the rules and taking advantage of it with political power.
Pf is public money hence govt is not giving free of cost even we are working in like cleaning to saleman etc but govt has not value for it to Citizens.only need to shown the own works to the headt of the dept show that get promoted that all.
Joseph you have a valid question and you can send mail to PF deptt which can seen from their website.
Modi is trying to dictatorship in India and he enforces any law which he thinks is good. People have chosen him the PM to take the right decisions NOT to play with life/sentiments of people by imposing this kind of TDS rule on PF.
Also, I had quit the job in 2011 and if I would have withdraw the money in 2014 then my full money would have come to my account but since I had a trust on the Govt and withdrawed it in 2015 after June I had to pay income tax on my PF money. Arun Jaitey is the main culprit behind this bcz Modi is a dumb person……..
MODI Ji i was one of the good supporter of your and party, but this circular iam completely disagree with your thoughts.
Sir think once that a middle class man saves a very less amount of money after all you want to deduct this money also wrong…
Bhagwan se daro..
PF is a hope of so many middle classers but if you deduct a single money from this definitely u fall…..
sir i want to know that my pf amount 15 26000/- of last two years. i left last company 2 month ago iwant to withdraw my pf amount . can tds deducted on this amount
While it is the good intention of the Govt. to protect the PF for retired life. But the following need to be definitely addressed.
The accumulated PF comprises of 4 parts.
A) Employees contribution of PF
B) Voluntary contribution of PF
C0 Employers contribution of PF
d) Interest accumulated on these contributions.
It is certain that while paying Income tax, each employee’s contribution is limited to 1,00,000. and tax paid accordingly. In the event of the contribution by the employee is over Rs. 1,00,000 say Rs. 7,20,000 per year comprises of 12% statutory 12% Voluntary and 12% of Employer. If the salary of the employee is Rs. 250000 per month, he contributes his share of Rs. 60,000 per month totalling to Rs. 7,20,000. He gets the basic deduction of Rs. 1,00,000 and the balance of Rs. 6,20,000 is disallowed and tax paid thereon. Now in the unfortunate instant of this employee takes his accumulation before completing 5 years due to very many reason, he has to pay Tax again on this 6,20,000. Not only Rs. 6,20,000 but if he continued the service for 3 years, his share of Rs. 18,60,000 is subject to tax and thus he comes in the bracket of 30%, poor fellow has to pay Rs. 6,00,000 as Tax. Please remember that he has already paid this tax in the respective year of assiessment. How to address this issue.
As for as the Employers share is concerned since it was tax free in the year of contribution, it is okay if it is withdrawn within 5 years to pay tax.
As for as the Interenst accumulation is concerned, it is also OK as we are not paying tax on the yearly accumulated interest.
But certainly, on employees own contribution that too with his Voluntary contriabuion which has already suffered tax, has to pay again. Total under the pretext of PF contribution for his future, he ended up in paying 60% of his contribution as tax. This is illogical and unacceptable. The Govt. must totally reduce the Employees contribution from the ambit of TAX.
Every year, Middle and lower class is being targeted for tax. Every year, Tax horizon is being increased, now tax on PF withdrawal. Even now Poor people are also being lured to bring their money (even if they have small amount) to keep it in the bank on the name of various scheme. Collecting money from people on name of savings and taxes, and then disbursing it to corporate lobby/high profile groups on the name of development by Bank Loans and other means, and finally, one day their loans/ debts are get off on various so called rules/ technical grounds.
If PF has to be taxed, then it shall be the interest portion only, NOT the entire amount.
This new EPF withdrawl rule is not all good for middle class people that too most of us are working in Private organisation. By this new amendment,Modi Government is pushing the tax to the middle class people but the Corporate people are enjoying the Government benefits. This new rule need to be withdrawn considering the middle class professional peoples are already paying tax to the Government.
say this is absolutely wrong decision by modi government. government think always to earn money from middle class people only. the private employees will be only suffered from this act. all is hell.
The epf amount, this is an our hard worked value of my holl life,so who is how decided to goverment TDS cut in my epf amount.that is 100% wrong.We are suffer in pvt. sector job.no duty timing, no job fix,no real life, than goverment is desided TDS cut in your EPF Amount.
I Requested to goverment pl.change the rule regarding TDS cut.
Dear Sir,
As per the aforesaid provision, 15G needs to be submitted in order to avoid the tax deduction. However, form no. 15G is not revised in accordance with thea bove provision. Kindly guide as to how to fill the form 15G.
I had left organization in Nov. 2014 after 3 years and applied for PF withdrawal. My Withdrawal request is still under process in PF office. Does TDS will be deducted from my PF amount even if I discontinued service before 01Jun2015 ?
I drawn my PF amount and Rs. 3500/- appx. deducted due to the following reason.
As per Para-9 of EPS Scheme,1995 service less than six months shall be ignored and above six months shall be rounded to a year. Accordingly this case service has been rounded off to TWO YEARS and withdrawal benefit for two years has been released. Amount was released as per above Quoted rule provision.
saala, ab govt. ki nazar garibon ke paise pe padi.
Government left or right but we private employees always in center.
No government thinking for private employee. If we need amount after 4 years urgently then what to do. All governmentso thinking just for government employees or industrialists.
PF is accumulated amount, the government should not deduct the TDS on accumulated amount. It should deduct every year if applicable (the government like to do think so)
In IT computation PF is considered as exempted income under 80C, i.e., already subject to Income tax, I agree if TDS is charged only on Interest earned on PF but not on complete withdrawal. If they do this it will become dual tax.
I also agree it’s too much and we need to raise the voice ..why always middle class has to surffer.
what the hell is that, we have to take some positive action against this rule.PF is only fund that salaried person survive after completion of service.
government have no-right to deduct TDS on pf fund.
tax on salary..tax on purchase..tax in dinning,we are paying already 10 times tax on our salaried income and now tax on-pf.
now this is enough..guys now this is time to wake-up..already government income is more then enough. almost 70% income of government gone in scam,black money etc.
pf the only fund with salaried person survive after retirement.
lets do some effective steps to boycott this rule. and we have to it guys for our future.
Can you explain the term “continuous service”. When we switch from one company to other, we might have a break of a week or two. Will it still be considered continuous service? In my case:
I served 2.4 years in my first company,
Took 3 months break, then joined second company and worked for 2 years.
Took 1 week break, then joined third company and i am working here for past 1.5 years. Will this be considered as continuous service?
IT’s genral peoples hard core salary earning , an comtribution of employee & employer is getting combined at PF office & earning INterest on the same.
There is no right of Govt. to deduct ones again a 10% TDS / say additional income tax ones employee paying income tax on over & above salary of Rs.2.50 lakh.
As well if govt is paying only Interest on the PF & not employees & Employers contribution , so there is not Govt’s right to deduct TDS on whole PF amt. If they want to deduct TDS than it’s should be apply only on the Interest earned on the Contribution & not on whole of the PF.
What about G.P.F.? Does same rule apply to G.P.F. also ?
What if an employee withdraw after 5 years but rendered continuous service of less than 5 years.
Rule 8 speaks for non deduction if any member renders continuous service of 5 years.