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.

1. Basic Provisions of 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 The amount from EPF has been withdrawn before completion of continuous 5 years of service, and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 The amount withdrawn is more than INR 50,000.

2. Time of deduction of TDS  under Section 192A

The Deductor is required to deduct TDS at the time of payment of the accumulated balance due to the employee.

3. Rate at which TDS is to be deducted under Section 192A

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.

4. Due date of TDS deposit and filing of requisite return

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 –

Quarter Due date
April – June 31st July
July – September 31st October
October – December 31st January
January – March 31st May

5. Circumstances under which TDS not deductible under Section 192A

TDS is not deductible under the following circumstances –

  • The aggregate amount of EPF withdrawal is less than INR 50,000.
  • The withdrawal has been done after continuous service of 5 years.
  • In case of a job change, the PF amount is transferred from one account PF account to another.
  • If there is a termination of employment due to employee’s ill health, completion of the project for which employee was employer, discontinuation of the employer’s business or any other reason which is beyond the control of the employee.
  • If the employee has submitted Form 15G/ Form 15H along with the PAN.

Also Read-

Particulars
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

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6 Comments

  1. siva says:

    I have deduction of 80K under 192A for withdrawal PF amount.So can you please guide which ITR do i need to submit and which head it should disclose.(I had salary income from current company)

  2. Krishnan says:

    If you go literally by above IT provisions, tax deducted during last 4years from pf members are against the rules. 99%pf members are opting for premature withdrawal due to job loss/ business closure etc i.e. reasons beyond their cobtrol and still crores have been collected by IT dept from these poor workers during last 4years. EPFO never gave option to mention the reasons for premature withdrawal.

  3. Xavier says:

    Dear Sir, in case of private trust , tds required to deduct as per provision of section 192 and return is required to file in form 24Q instead of form 26Q.

    1. ASHISH MITTAL says:

      Thanks. Could you clarify whether TDS isrequried ti be deducted on interest earned on PF balance post exiting the company where the PF balance is lying with Private Trust.

    2. ram150195 says:

      I agree on your opinion that TDS ought to be deducted under 192 and not 192A for private trust (being a trust constituted by exempt establishment).
      Whether tax is to be deducted by the Trust or employer company ?
      If 192A is not applicable, whether tax is to be computed under Rule 9 of Part A of Fourth Schedule to the Act ?

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