Hi Seniors, I heard that PF rules has been changed from 1 June 2015 that PF will calculate on gross salary not on basic . is it true or not ??????
From India, Delhi
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3From India, Delhi
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There's no change in PF contribution at all, but there is an act that has been amended for PF withdrawal. I also received a mail from the PF authority stating:
Amendment in Section 192 A of IT in respect of PF balance
The Finance Act, 2015 (20 of 2015) has inserted section 192A of the Income Tax Act from 01-06-2015 onwards regarding the deduction of TDS (Tax Deduction at Source) on the payment of accumulated Provident Fund balance due to an employee.
- TDS shall be deducted on accumulated Provident Fund balance if the accumulated PF balance is more than or equal to Rs. 30,000/- with service less than 5 years. TDS will be deducted at the following rates:
- (a) TDS will be deducted @ 10% provided PAN is submitted. In case Form 15G or Form 15H is submitted by the member, then no TDS shall be deducted.
- (b) TDS will be deducted at the maximum marginal rate (i.e., 34.608%) if a member fails to submit PAN and Form 15G or Form 15H.
- TDS shall not be deducted in respect of the following cases:
- (a) Transfer of PF from one account to another PF account.
- (b) Termination of service due to ill health of the member, discontinuation/contraction of business by the employer, completion of the project, or other cause beyond the control of the member.
- (c) If the employee withdraws PF after a period of five years of continuous service, including service with a former employer.
- (d) If PF payment is less than Rs. 30,000/- but the member has rendered service of less than 5 years.
- (e) If the employee withdraws an amount more than or equal to Rs. 30,000/-, with service less than 5 years but submits Form 15G/15H along with their PAN.
• Kindly take note that TDS is deductible at the time of payment of the provident fund in Form No. 19. Form No. 15H is for senior citizens (60 years & above), while Form No. 15G is for individuals having no taxable income. Form 15G & 15H are self-declarations and may be accepted as such in duplicate. Form 15G and 15H may not be accepted if the amount of withdrawal is more than Rs. 2,50,000/- and Rs. 3,00,000/- respectively. Members shall quote PAN in Form No. 15G/15H and in Form No. 19.
• Members who have rendered continuous service of 5 years or more, including service with a 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 discontinuance of business of the employer or other cause beyond the control of the member shall not be required to submit PAN, Form No. 15G/15H along with Form No. 19. In such cases, no income tax (TDS) shall be deducted in terms of Rule 8 of the Fourth Schedule to the Income Tax Act, 1961.
Hope this provides a clear answer to your query.
Warm Regards,
Sandhya
From India, Gurgaon
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Amendment in Section 192 A of IT in respect of PF balance
The Finance Act, 2015 (20 of 2015) has inserted section 192A of the Income Tax Act from 01-06-2015 onwards regarding the deduction of TDS (Tax Deduction at Source) on the payment of accumulated Provident Fund balance due to an employee.
- TDS shall be deducted on accumulated Provident Fund balance if the accumulated PF balance is more than or equal to Rs. 30,000/- with service less than 5 years. TDS will be deducted at the following rates:
- (a) TDS will be deducted @ 10% provided PAN is submitted. In case Form 15G or Form 15H is submitted by the member, then no TDS shall be deducted.
- (b) TDS will be deducted at the maximum marginal rate (i.e., 34.608%) if a member fails to submit PAN and Form 15G or Form 15H.
- TDS shall not be deducted in respect of the following cases:
- (a) Transfer of PF from one account to another PF account.
- (b) Termination of service due to ill health of the member, discontinuation/contraction of business by the employer, completion of the project, or other cause beyond the control of the member.
- (c) If the employee withdraws PF after a period of five years of continuous service, including service with a former employer.
- (d) If PF payment is less than Rs. 30,000/- but the member has rendered service of less than 5 years.
- (e) If the employee withdraws an amount more than or equal to Rs. 30,000/-, with service less than 5 years but submits Form 15G/15H along with their PAN.
• Kindly take note that TDS is deductible at the time of payment of the provident fund in Form No. 19. Form No. 15H is for senior citizens (60 years & above), while Form No. 15G is for individuals having no taxable income. Form 15G & 15H are self-declarations and may be accepted as such in duplicate. Form 15G and 15H may not be accepted if the amount of withdrawal is more than Rs. 2,50,000/- and Rs. 3,00,000/- respectively. Members shall quote PAN in Form No. 15G/15H and in Form No. 19.
• Members who have rendered continuous service of 5 years or more, including service with a 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 discontinuance of business of the employer or other cause beyond the control of the member shall not be required to submit PAN, Form No. 15G/15H along with Form No. 19. In such cases, no income tax (TDS) shall be deducted in terms of Rule 8 of the Fourth Schedule to the Income Tax Act, 1961.
Hope this provides a clear answer to your query.
Warm Regards,
Sandhya
From India, Gurgaon
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Amendment in Section 192A of the IT Act, 1961- Instructions for deduction of TDS on withdrawal f.pdf
PF WITHDRAWAL RULES.zip