The Employees Provident Fund (EPF) is a saving scheme introduced, under the Employees Provident Fund and Miscellaneous Act, 1952, with an aim to promote savings which can be used post-retirement of an employee. Section 192A was inserted vide the Finance Act 2015 applying the tax deduction at source (TDS) provisions in case of the premature withdrawal from Employees Provident Fund.
The current article highlights the provisions of section 192A covering basic provisions, time of deduction of TDS, the rate of deduction of TDS, the due date of deposit and filing of return and the circumstance under which TDS is not deductible under section 192A.
Section 192A stipulates that the trustees of the Employees’ Provident Fund or any person authorized under the scheme are required to deduct tax at source in case the employee doesn’t fulfill conditions stipulated under rule 8 of part A of Fourth Schedule. In a nutshell, the TDS is deductible, if the following conditions are satisfied –
1. The amount from EPF has been withdrawn before completion of continuous 5 years of service, and
2. The amount withdrawn is more than INR 50,000.
The Deductor is required to deduct TDS at the time of payment of the accumulated balance due to the employee.
In case the provisions of section 192A are applicable, the Deductor is required to deduct TDS @ 10%. However, if the employee fails to furnish his Permanent Account Number (PAN), then, the Deductor would deduct TDS at the maximum marginal rate.
The Deductor is liable to deposit TDS with the Government within 7 days of the next month in which TDS is deducted. However, in case of TDS deducted for the month of March, the same is to be deposited on or before 30th April.
The Deductor is required to file Quarterly return in Form 26Q within following due dates –
|April – June||31st July|
|July – September||31st October|
|October – December||31st January|
|January – March||31st May|
TDS is not deductible under the following circumstances –
|TCS – Tax Collection at Source – A Complete Guide|
|TDS Rate Chart for Financial Year 2019-2020|
|Section 192 – TDS on Salary|
|Section 193: TDS on Interest on Securities|
|Section 194 – TDS on dividend|
|Section 194A: TDS on interest other than interest on securities|
|Section 194B and Section 194BB – TDS|
|Section 194C – TDS on Contractors|
|Section 194D – TDS on insurance commission|
|Section 194DA – TDS in respect of Life Insurance Policy|
|Section 194E – TDS on payment to Non-resident Sportsmen or Sports Association|
|TDS under Section 194EE and Section 194F|
|Section 194G TDS on Commission on Sale of Lottery Tickets|
|Section 194H – TDS on Commission or Brokerage|
|Section 194I of Income Tax Act, 1961 – TDS on Rent|
|Section 194IA TDS on transfer of immovable property|
|Section 194IB – TDS on Rent paid by Individual / HUF|
|Section 194LA: Payment of Compensation on acquisition of certain immovable property|
|TDS under Section 194LB, 194LBA, 194LBB and 194LBC|
|Section 194LC: TDS on income by way of interest from an Indian Company or a business trust|
|Section 194LD TDS on income by way of interest on certain bonds and Government Securities|
|Section 194J TDS on Fees for Professional or Technical Services|
|Section 194N – TDS on Cash Withdrawals|
|Section 194M: TDS on Payment of certain sum by certain Individual / HUF|
|Section 195 TDS on payment of any other sum to a non-resident|