TDS on withdrawal from PF wef 1st June 2015

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 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 is 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.