Employee Provident Fund Organisation vide circular on May 20, 2019 to it's zonal & Regional Commissioners has forwarded the circulars regarding the deduction of tax at sources i.e Income Tax Deduction from salaries under section 192 of the Income Tax Act, 1961 during the financial year 2018-19. The EPF circular has emphasized the situations under which the accumulated PF balance due and payable to the employee is not liable for TDS under section 192A of the Income Tax Act, 1961 as below.
(1) if employee has rendered continuous service with his employer for a period of 5 years or more or
(2) If though employee has not rendered such continuous service, the service has been terminated by reasons of :- Ill health of member / by the contraction / discontinuation of employer's business or other cause beyond the control of the member or
(3) Transfer of PF from one account to another PF account due to change of employment by the employee.
for the purpose of ascertaining "Continuous Services' as stated above in the point (1) and (2) the total service in the present establishment as well as previous establishment is counted and therefore it is advisable for employees to merge all the PF accounts.
Employers of establishment covered under the Act, are advised to appraise their employees during their exit from employment on the above applicable TDS on payment for PF settlement.
Attachment with this alert is the copy of the above said EPFO and CBDT circulars for your perusal
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