TDS on EPF withdrawal, How to save TDS on pf withdrawal, EPF withdrawal rules: Tax Deducted at Source (TDS) becomes applicable on retirement-oriented investment instrument--Employee provident fund (EPF) if an employee withdraws money from the respective EPF before five years of account opening.

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However, as per the EPF withdrawal rules, in certain cases, an account holder withdrawing the balance before five years of completion can avoid tax deductions.

TDS on EPF withdrawal: When is TDS not deducted in EPF withdrawal?

As per the EPFO portal, TDS shall not be deducted in the following cases:

  • If service rendered is 5 years or more, ie., if the employee withdraws PF after a period of five years.
  • If the PF payment is less than Rs. 30,000 but the member has rendered service of less than 5 years.
  • If an 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
  • In case of transfer of PF from one account to another PF account.
  • In case of termination of service due to ill health of member or discontinuation of business by employer or completion of a project or other cause beyond the control of the member.

ALSO READ--EPF passbook password change: Here's how to reset your password - Step-by-step guide

Income tax on EPF withdrawal: When is TDS applicable in PF withdrawal?

TDS shall be applicable in the following cases: 

If an employee withdraws an amount more than or equal to Rs 30,000 with service lesser than 5 years, then

  • In case the employee fails to submit PAN, then TDS will be deducted at the maximum marginal rate i.e. 34.608 per cent.  
  • In case PAN is submitted, TDS will be deducted at 10 per cent if Form-15G/15H is not submitted provided.

It is to be noted that TDS is deductible at the time of payment. Form 15H is for senior citizens i.e., 60 years & above whereas Form 15G is for individuals having no taxable income.
Form 15G & 15H are self-declarations and may be accepted as such in duplicate, as per the official notification.

(With inputs from official notification)

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