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

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Category : Income Tax (27473)
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Tags : Budget (1956) Budget 2015-16 (272) EPF (288) EPFO (257) PF (15) Provident Fund (223) TDS (1024)

3 responses to “TDS on withdrawal from PF wef 1st June 2015”

  1. seshu says:

    I do have the same question Shailesh.
    Please post your comment if you have any update.

  2. Seshu says:

    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.

  3. Amlan Dutta says:

    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

  4. BKK says:

    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

  5. Jerry says:

    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.

    • anee says:

      Yeah,
      Same problem occurred with me they deducted around 30 percent on my pf aamount 3rs00 rs just because i was not aware with the rule however i have already updated my pan no no. In uan member portal.

      Please suggest what to do . is deducted amount as tds could be returned if now form 15 submitted.

  6. vijay arya says:

    hello sir
    if pan card was submitted without form no. 15G so how much tds will be dudect.

  7. Konda says:

    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.

  8. JAMES FENANDES says:

    Joseph you have a valid question and you can send mail to PF deptt which can seen from their website.

  9. Aditya says:

    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……..

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