As per the latest amendments and circular in PF, now TDS will be deducted on an employee's PF withdrawal amounts if the service is less than 5 years and the amount is more than Rs. 30,000/-. The provisions and amendments are mentioned below.
TDS Deduction Rates
1. Income Tax shall be deducted at source (TDS) at the following rates if at the time of payment the accumulated PF balance is more than or equal to Rs. 30,000/- with service less than 5 years:
- TDS will be deducted at 10% provided PAN is submitted. If Form No. 15G or 15H is submitted by the employee, then no TDS shall be deducted on their PF payment.
- TDS will be deducted at the Maximum marginal rate (i.e., 34.608%) if a member fails to submit PAN (and no Form No. 15G or 15H).
No TDS in Certain Cases
2. No TDS 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 of business by employer/completion of project/other causes beyond the control of the member.
- If an employee withdraws PF after a period of five years.
Notes
3. Notes:
- Form 15H is for senior citizens (60 years & above) and Form 15G is for individuals having no taxable income. Form 15G & 15H are self-declarations and may be accepted as such in duplicate.
- Members must quote PAN in Form No. 15G/15H and in Form No. 19.
- Form Nos. 15G and 15H cannot be accepted if the amount of withdrawal is more than Rs. 250,000/- and Rs. 300,000/- respectively.
- If Form 19 has already been submitted and the service period is less than five years, you are advised to furnish a copy of PAN card and other related forms with a covering letter before 28/05/2015 to avoid future troubles.
Regards