In 2015, the EPFO had issued a notification that TDS would be applicable on EPF full withdrawal Claims where accumulation (balance) is more than Rs 30,000 and the EPF member (Employee) has worked for less than Five years.
The TDS threshold limit has later been raised to Rs 50,000 in 2016-17. So, TDS is not applicable if the PF withdrawal amount is less than Rs 50,000.
If your EPF withdrawal amount is more than Rs 50,000 and PAN has not been verified in EPF portal then TDS will be applicable in most of the cases. In such a scenario, (if eligible) you can submit Form 15G/15H to avoid TDS being levied on your PF withdrawal amount.
In this post, let us understand – When is TDS applicable on EPF withdrawals? What are the rules related to TDS on payment of EPF Claim? How to avoid TDS on PF Withdrawal if PAN is not verified on EPF Member Portal? How to fill and submit/upload Form 15G? What is the procedure to submit EPF Withdrawal Claim Form 15G or Form 15H online?
EPF Withdrawals – Provisions related to TDS
TDS is not applicable in the following cases;
- On Transfer of PF from one account to another PF account (EPF A/c) .
- On Termination of service due to ill-health of EPF member and withdraws his/her accumulation.
- If on discontinuation of Business by the Employer or any cause beyond the control of EPF Scheme’s member (Employee).
- If PF withdrawal amount is less than Rs 50,000.
- In case, employee withdraws amount more than with service less than 5 years but submits Form 15G /15H along with his / her PAN.
TDS is applicable in the following scenarios;
- If employee withdraws amount more than or equal to Rs 50,000, with service less than 5 years, then:
- TDS will be deducted @ 10% if Form-15G/15H is not submitted provided PAN is submitted.
- TDS will be deducted @ maximum marginal rate (i.e., 34.608%) if employee fails to submit PAN.
Below is the flowchart to understand these implications.
How to submit EPF Withdrawal Claim Form 15G online?
I have observed that many of the EPF members are unable to get their PAN digitally verified in EPFO Unified Member Portal. The main reason for this is mismatch of personal details (like name or Date of birth) given in EPF UAN and PAN database (IT department).
Because of this, the EPFO is levying TDS on EPF full withdrawals. The only way one can escape from TDS is by submitting Form 15G or Form 15H (if eligible).
Kindly note that even if TDS is not levied, EPF withdrawal is treated as a taxable income if your service period is less than 5 years.
Who can submit Form 15G?
Tax payers who meet below conditions can file Form 15G with their tax deductors ;
- Any Resident Indian (or HUF) who is below 60 years of age and
- If your tax liability for the concerned Financial Year should be ‘NIL’ and
- If total interest income for which Form 15G is being submitted, is less than basic exemption limit (i.e., Rs 2.5 Lakh for FY 2019-20). For example : If your salary income is Rs 1 Lakh and interest income is Rs 3 Lakh and your tax deductions u/s 80C is Rs 1.5 Lakh then you can not submit Form 15G. Here, your interest income is Rs 3 Lakh which is above the basic exemption limit.
Who can submit Form 15H?
Tax payers who meet below conditions can file Form 15H with their tax deductors ;
- Any Resident Indian who is 60 years old or will be 60 years old during the financial year and
- If taxable income (after claiming tax deductions) is less than the basic exemption limit.
How to submit Form 15G for EPF Withdrawal online?
Until recently there is is no online provision to submit Form 15G to the EPFO. However, the EPFO has come up with an online facility to upload Form 15G while submitting EPF Withdrawal claim online.
This facility has recently been made available in EPFO’s Unified Member Portal. You can now upload Form 15G / Form 15H and submit along with your EPF online withdrawal claim form.
- Kindly visit EPFO Member Interface portal and login with your credentials.
- Click on Online Services menu tab and click on Claim (Form 31, 19, 10C) option.
- Verify last 4 digits of your bank account.
- You will then be able to view EPF Withdrawal claim form.
- Below ‘I want to apply for’ field , you can see Upload Form 15G option.
- You can download Form 15G, take a print of it, fill it (only Part-1) with the required details, scan it, convert it into PDF file and then upload your Form 15G or Form 15H.
In case, you are unable to upload Form 15G along with EPF withdrawal claim form online, you can submit (by post or if possible in person) the Form 15G physical copy at the EPF regional office, along with the copies of PF claim acknowledgement, PAN card and Aadhaar card. Kindly mention your UAN and PF number on top of Form 15G.
You may find below related articles useful;
- How to fill new Form 15G / Form 15H?
- When to submit Form 15G / Form 15H? | Details & Clarifications
- Latest TDS Rates FY 2019-20 | TDS Rate Table for AY 2020-21
- Tax Implications of EPF, PPF & NPS Withdrawals (Full / Partial) & Maturity proceeds
- Online EPF Claim submission : Process Flow & Eligibility Conditions
(Post first published on : 18-September-2019)