If you are an employee and contributing every month to Employees Provident Fund then you should read this.
Withdrawal from your PF account can be taxable in some cases and non-taxable in certain circumstances.
PF withdrawal before completion of 5 years of service is taxable.TDS will be deducted if the amount withdrawn
is above Rs. 50,000/- and is withdrawn before completion of five years of service.
Therefore, TDS will be deducted on PF withdrawal:
• If the amount of withdrawal is Rs. 50,000/- or above and is withdrawn before completion of 5 years of service.
• TDS at 10% will be deducted under section 192A of the Income Tax Act’1961. However, if PAN is not furnished
then TDS @20% will be deducted (Budget 2023).
• TDS will be deducted at the time of payment.
• If the employee is a member of an unrecognized PF then withdrawals are taxable and TDS will be deducted
irrespective of the period of service.
TDS on EPF withdrawal will not be deducted in the following cases:
• If the amount is withdrawn after completion of 5 years of service.
• If the amount of withdrawal is less than Rs. 50,000/-.
• Transfer of PF funds from one account to another.
• Termination of service due to a employees’ illness or if the employer decides to stop doing the business, the
conclusion of a project, or any other reason beyond the employee’s control.
• TDS will also not be deducted if the employee withdraws an amount equal to or more than Rs. 50,000/- with less
than 5 years of service but submits form 15G/15H along with PAN.