From 1st of June 2015 a new Amendment in Section 192A of the IT Act, 1961 – Instructions for deduction of TDS on withdrawal from PF
Income Tax shall 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 lessthan 5 years:-
a) TDS will be deducted @ 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).
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 less than 5 years.
• If employee withdraws amount more than or equal to Rs. 30,000/-, with service less than 5 years but submits Form 15G/15H along with their PAN
1. TDS is deductible at the time of payment.
2. TDS will be deducted under Section 192A of Income Tax Act, 1961.
3. 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.
4. Members must quote PAN in Form No.- 15G / 15H and in Form No. 19.
5. Form Nos. 15G and 15H cannot be accepted if amount of withdrawal is more than Rs. 2,50,000/- and Rs. 3,00,000/- respectively
A flow-chart is appended for understanding the implications of the Amended Provision in the Income Tax Act 1961
Appended below is the Gazetted Notification of the same