EPFO (Employees Provident Fund Organization) has issued a new circular relating to applicability of TDS (Income Tax deduction at Source) on EPF withdrawals. These new provisions are effective from 1st June, 2015. TDS is applicable on EPF withdrawal where accumulation (balance) is more than Rs 30,000 and the EPF member (Employee) has worked less than Five years.
(Budget 2016-17 update : In case of payment of accumulated balance due to an employee in EPF, the TDS limit is being raised from Rs 30,000 to Rs 50,000. So, TDS is not applicable if the PF withdrawal amount is less than Rs 50,000. This new TDS thresh-hold limit will be effective from 1st June, 2016 onwards. Click on the below image to download EPFO’s latest notification on this new amendment.)
As per EPFO’s circular, “the Finance Act, 2015 (20 of 2015) has inserted a new section ‘192A’ regarding the payment of accumulated provident fund balance due to an employee. The provision shall take effect from June 1, 2015.”
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.
- 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
30,000(new limit is Rs 50,000). - If employee withdraws amount more than or equal to Rs.
30,000/- (Rs 50,000), 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.
30000/- (Rs 50,000), with service less than 5 years, then:
a) TDS will be deducted @ 10% if Form-15G/15H is not submitted provided PAN is submitted.
b) 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.
Other Important points;
- TDS (Tax Deducted at Source) is deductible at the time of payment. TDS will be deducted under Section 192A of Income Tax Act, 1961.
- 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. (Do note that not every individual or HUF can submit Form no 15 G. Only the individual / HUF, whose tax on the estimated income for the year is NIL and the amount of interest income from all the sources / securities does not exceed the minimum exemption limit, can submit Form 15 G form. NRIs can not submit Form 15G)
- EPF Members must quote PAN in Form No.- 15G / 15H and in Form No. 19 (EPF Withdrawal Form).
- Members who have rendered continuous service of 5 years or more, including service with 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 his ill health, contraction or discontinuance of business of 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 as per Rule 8 of Fourth Schedule to the Income Tax Act, 1961.
- 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.
- If TDS is not applicable then it does not mean that the EPF withdrawals are not taxable. Do note that, if you withdraw your PF balance before the expiry of five years of continuous service, then it is taxable in the year in which withdrawal has happened. In addition to this, your employer’s contributions along with the accumulated interest amount will be taxed as “profits in lieu of salary”. Interest accumulated on your (employee) contributions will be taxed under the head “Income from other sources”. The tax deductions claimed on your contributions will be revoked or rolled back, and shall be liable to tax.
These new amendments may discourage pre-mature PF withdrawals and may promote long-term savings.
Latest Update (20-Apr-2016) : “Govt rolls back new EPF withdrawal norms and old system will continue. The notification which was issued on 10th Feb, 2016 has been cancelled.” So, the existing rules will be continued..
Latest Update (18-April-2016) : The Minister of state for Labour and Employment (Independent charge) now decides to postpone the date of implementation of new conditions for EPF withdrawal to 1st August 2016. This was earlier planned for implementation from 1st May 2016.
Budget 2016-17 New EPF Rules : Latest News (08-March-2016) : The Budget 2016-17 proposal of levying income tax on 60% of EPF balance has been withdrawn by the government. So, no tax will be levied on PF withdrawals at the time of retirement. The other Budget proposal to make 40 per cent of the total withdrawal from the National Pension Scheme (NPS) will however remain unchanged.
Budget 2016 New EPF Rules : Latest News (01-March-2016) : As per the Budget 2016 proposal, at the time of retirement, 40% of the EPF lump sum withdrawal is tax-exempted, 60% of the corpus is taxable as per the applicable Income Tax Slab. To avoid this, the EPF member has to invest this 60% balance in an Annuity life insurance product. The Annuity income will be Tax-free. Click here for more details..
Latest News (24-Feb-2016) : New EPF Withdrawal Rules w.e.f 10-Feb-2016. Full PF balance withdrawal is not allowed till the retirement age. Click here for more details..
Latest News : You can now submit PF new claim forms directly to EPFO office without your Employer’s attestation.New Form 31 UAN, Form 10c UAN & Form 19 UAN. Click here for complete details.
Continue reading other EPF related articles;
- All you need to know about EPFO’s Universal Account Number (UAN)
- How to transfer your EPF funds online through OTCP & UAN Member Portal?
- How is interest calculated on EPF Account – Components & Illustration?
- How to track in-operative EPF account through EPFO’s online Helpdesk?
- EPFO SMS Service – Get your EPF A/c Balance as SMS
- Download new Form 15G & Form 15H
- How to fill Form 15G / Form 15H?
- How to check online if my Company is depositing my EPF amount on a monthly basis?
1. If there is a gap in contribution, in which year ITR is the taxable interest income to be reported ? In year of accrual or in year of withdrawal or both are possible ?
2. To calculate taxable period of non contribution, should exact dates be used or Wage Month can be used ? For eg. DoE from first employer is 9th of the March, gap of some months and current employer DoJ is 5th of October.
3. If first employer worked for 15 years, gap of 2 years, then started working again, would the continuous service calculation consider the first employer also ?
Dear Mr. Reddy, I worked in a company between the year 2010 – 2015, left the job and went to abroad. Service period was 05 years and 02 months.
My UAN is active but the company is closed.
Now I want to close my PF a/c and withdraw full amount but in KYC, PAN is not linked with UAN. Any TDS will be imposed if I go for claim the full amount with Form 15G, its more than 04 lakhs. Please advise. Thank you.
My continuous service is 8 years and 7 months recently i withdrawn my pf after retirement ,PF dept has deducted 10% TDS saying that your establishment has not open new pf account after your rejoining the company after3days (AS i got retired at the age of 58 years ,but rejoined the company and there is no disruption in PF payment )
they also said that your company has not mentioned your exit date from pf contribution now how can i claim refund of TDS
Dear Madan ji,
You can file ITR and can claim it (if eligible).
Related articles :
Tax Implications of EPF, PPF & NPS Withdrawals (Full / Partial) & Maturity proceeds
Hi,
I’m not eligible for 15G (my income for 2021-22 is taxable) and my PAN details are already available under KYC. I tried withdrawing on EPFO portal.
Service < 5 years (ended in 2019)
Amount (only PF) – 55000 approx
PAN available
15G – cannot attach as I have taxable income in new company
Claim rejected – reason – Form 15G not attached.
Please explain what can be done.
Dear Sakshi,
If you are currently employed and contributing to the EPF scheme, you may kindly get the PF funds transferred from your previous EPF a/c to new EPF account.
Related articles :
* Online EPF Transfer | How to transfer PF funds to another EPF account Online?
* What happens to EPS on Transfer of EPF account (or) when you switch Jobs?
Hello sir,
I worked for 2 company and if i calculate my total service it is
in first company – 4 th july 2016 to 20 jun 2018
in 2nd company – 26th june to 30th june 2021
if i withdraw my pf is it taxable . please guide me
Dear Amit,
What is the work exp period in 2nd company?
Did you get the funds transferred from 1st to 2nd EPF a/c ??
Related article : Tax Implications of EPF, PPF & NPS Withdrawals (Full / Partial) & Maturity proceeds
No Sir,
I have not transferred the fund from 1st company to 2nd company.
My concern is i worked for 1st company for 1 years 11 months 20 days(4 th july 2016 to 20 jun 2018) and in 2nd company 2 years 11 months 26 days (4th july 2018 to 30th june 2021). but if i consider i have contributed to epf for 5 yeas ( exactly 60 months ) but if i count day wise its 15 days less in 5 years.
so could u pls help me to understand if i withdraw the pf is it taxable.
Dear Amit,
Only if you consolidate the two EPF accounts then cumulative service period is counted.
If your service period is 5 years, the total EPF claim would be tax-exempt.
In case, for any reason, the EPFO deducts any TDS, you can claim it as REFUND (if any) by filing ITR.
I have worked in a company from 2011 to 2020 But company gave me 3 days break as my PF contribution was continued . On my retirement in 2020 company HR department by misunderstanding put my date of exit 2015
So when I applied for final withdrawal of PF , TDS was deducted @ 10%
Now is it possible to get the refund of TDS
Dear Madan,
3 days break? I am unable to understand your query?
An EPF member can now update Date of Exit online.
1) Log in to the EPFO portal with your UAN (Universal Account Number) and password.
2) Go to “Manage” section and click on “Mark Exit”. You will then get the option to choose your PF account number from the “select employment” dropdown menu.
You cannot mark your date of exit before two months of leaving the company.
yes you can take ur tds amount 7406698205 call me
Dear madam,
My claim is rejected by pf office with remark ” claim rejected.Amount 10 lac above please submit member detail and service through employer.
Prior I have submitted claim on line on EPFO portal.
My company is closed.pl suggest what to do
Sir,
My service is more than 12+ years and PF accumulations as per passbook are as under:
Employee share: 1,07,297/-
Employer share: 32,801/-
EPS : 58,469/-
———–
Total 1,98,567/-
Further, my Aadhaar is linked and shows verified in home page of member portal. But, my PAN is linked and PAN number reflects in home page of member portal, but is not showing PAN is verified.
Shall I apply for withdrawal even though my PAN is not verified. Will TDS be deducted in my case? Form No.15G is required?
Kindly reply.
Dear SB,
Even if TDS gets deducted, you can claim it as REFUND when you file your ITR, as epf claim amount is tax free if service period is more than 5 years.
I worked for same employer from Dec 2008 till Nov 2017. But I discontinued the job for some months in between, from Feb 2012 to Dec 2012.
The current EPF account shows joining date as 01-01-2013, it is when I started the job again for the employer. I wanted to claim the EPF amount now as I am relocated our of India. As the second term of my employment is only 4 years and 11 months, will I be taxed after withdrawal? Or the EPF duration will be calculated from 2008, when I joined the employer initially? Although my currernt EPF statement does show the transfer of amount from my initial EPF account.
Dear VS,
Do you mean to say that your employer had created two EPF accounts during the period 2008 and 2017?
If the transfer has successful been done, your service period gets carried forward and its considered as more than 5 years ..such claim amount is tax-free income.
But, the interest amount during the non-contribution period(s) is a taxable income.
Related articles :
* EPF Interest Income & Withdrawals | Tax Implications | Is EPF Interest taxable?
* Why should you Withdraw Old EPF Account Balance? | In-operative EPF A/c Timeline
Thanks for replying. I worked for this employer from 2008 till 2012. Then I took a break of 10 months and then again join this employer from Jan 2013. As there was a gap of 10 months and my second term from 2013 till 2017 is 4 years and 11 months, will the amount be taxed?
Hello Sir,
I have a query, we have 2 staff who has joined us recently, one who was earlier working in various banks for more than 20 years. He has left his service for more than 3 years and joined us. Would he be coming under PF with us. The other whom we pay more than Rs. 25000 has joined from another company, where there was no deduction of PF, would PF be applicable to him?
Dear Josephine,
Kindly consult a CA/CS in this regard.
I have PF account from 2006. I left my last organization very recently. They have their PF trust. I want to withdraw my last PF amount as need it for daughter education. Organization told me that 10% TDS will be applicable for that . Is there any way to withdraw it without TDS cut because i am going to use it for education of my child .
Hi Sreekanth,
This is Rahul, I have 5+ years of experience and I have withdrawn 62000 advance from my of account. Is TDS applicable for me? My worry is that UAN shows my DOJ as April 30 2015 and DOE as May 1 2015 which is one day, mistake made by our employer. But from April 2015 I have more than 5 years experience.
I have withdrawn PF . My continued service is around 10 years but 10 % TDS has been deducted. How I can claim 10% tds which has been wrongly deducted. Should I raise grievance.
Hi, Sreekanth,
I have completed my employment 8+ year and I resigned. Currently I am unemployed (6month). My PF and pension total amount is 3.5 lakh. Is it taxable? Need to attached 15G?
My Adhar is verified demographic, but while claim process it shows error of mismatch of adhar demographic details. How can solve it?
Dear Milankumar,
If your total service period is more than 5 years then your EPF withdrawal claim is not subject to tax.
Is your PAN linked to UAN?
Yes, it was also linked
Dear Milankumar,
Kindly check if the your name format (First-middle-surname) match across Aadhaar, EPF UAN and PAN..
Hi Sir,
I am Khalid , i want to claim my pf and pension as well.
my total pf balance is 46000 and pension amount about 20000,
i want to know that tax is applicable on only pf amount or plus of both . either i need to fill 15G or not. please help thanks
Dear khalid,
May I know your total service period.
Hi Sreekanth,
I have left my job in company A (4yrs) and now working in another company B ( 10 months).
My question is if I wanted to apply for PF withdraw after completing 5 years for some financial problems, Can I apply for withdrawal ? If yes how much I’m eligible for withdrawal ?
Note: I have already raised request for transferring my old account to new of account.
Thanks.
Hi Sreekanth,
My PAN details are reflecting under digitally approved KYC, but the status says NA. When I am trying to withdraw my PF amount it saying PAN not verified, please help how to get it verified in UAN portal.
Dear Upasana,
It’s been the same case with other EPF members for the last one week or so.. looks like there is some technical issue @ EPFO UAN database. We may have to wait for sometime..
Hi Sreekanth, i have served a total of 5.5 years of service across 2 companies in India after which I moved out of India (5+ years now outside India). The EPF from the first company (3.5 years of service) was withdrawn and now I want to claim EPF from the 2nd service of 2 years. Pls let me know if I claim PF now will there be any TDS deduction and if yes then is there a way to avoid TDS like by filling form 15G or something else.
Dear Dipen,
Whether TDS is levied on or not, your EPF claim from second EPF a/c is a taxable income.
Kindly read : EPF Interest Income & Withdrawals | Tax Implications | Is EPF Interest taxable?
Thanks Sreekanth. I believe adding my current India income and the EPF amount will not cross the minimum slab. Hence I wanted to know how can I avoid TDS deduction and if this is not possible can I claim it back in IT return filing?
Dear Dipen,
Yes, you can claim it in ITR..
Hi Srikanth, My EPF Subscripition is more than 5years, due mismatch in aadhar name and pan card name i am unable to seed my pan card. My name in aadhar is K Navaram Kumar, in PAN card is Kommu Navaram Kumar, how to withdraw money without TDS deduction.
Dear Navaram,
Ideally, EPFO should not deduct TDS if service period is more than 5 years.
In case, they do, you can claim it when filing your ITR.
Related article : EPF Interest Income & Withdrawals | Tax Implications | Is EPF Interest taxable?
Hello sir,
I have PF worth more than 2 lakhs, but my withdrawal request (form 19 and 10C) keeps getting rejected, each time with a different reason like Form 15G not uploaded, PAN card details not available, Certificate A/B/C/D/E not uploaded, etc.
I’m not eligible for 15G (my income for 2019-20 is taxable) and my PAN details are already available under KYC. I tried withdrawing on Umang app as well, but they asked me to upload 15G too. Could you please advise on how I can withdraw my PF?
Dear Sonali,
Kindly read : EPF Withdrawal Claim Form 15G – How to submit Form 15G online to avoid TDS on PF Payment?
Hi Sreekanth,
I had submitted an online claim request for my old EPF account (form 19) since I am not employed for more than a year. But the claim got rejected with below reason:
Your Claim [ Claim Id – **** ] has been rejected due to : 1) APPLY F/13 TO TRANSFER THE AMOUNT TO SUBSEQUENT SERVICE OF ****** 2) CERTIFICATE ENCLOSED IS IMPROPER
However, I am not able to understand the reject reason since I had applied for withdrawal but reject reason mentions transfer. Please let me know what this reject reason means and how can this be corrected.
Dear Shweta,
Are you currently employed and contributing to EPF scheme again?
I am not currently employed. The contributions in this particular account were done till 2013 only. However, I have other PF account which had contributions from 2013 onwards till 2018 (from my next employer). I am not employed since 2018.
Dear Shweta,
Suggest you to get the funds from your old EPF account to the latest EPF account (Consolidation) and then can make a full PF claim request..
Dear Sir,I have completed 6 years of service.Pl.tell me form no 15 G is Required or Not.
Dear Bhushan,
As your service is more than 5 years, TDS should not be applicable on your EPF claim amount.
Sir, my service was for 3 years, and my epf account has around 1 lakh rs including pension, employee and employer contribution. However i was terminated from my job and the reason showing in EPFO portal is “cessation of service”. my pan is not getting verified in the portal. So if i submit the online claim form, will tds be deucted from it or not ?
Dear Nitish,
As your service period is less than 5 years and PF claim is more than Rs 50k, EPFO may deduct TDS.
Related article : Tax Implications of EPF, PPF & NPS Withdrawals (Full / Partial) & Maturity proceeds
Hi Sreekanth,
I have withdrawn my EPFo full amount with less than 5 years experience and EPFo settled the amount 200000 but they have deducted 10% even I submitted form15 g.Will i get the deducted amount at form16 filing or not. please clarify on it.
Dear Sreekanth,
You can claim the TDS when filing your Income Tax Return based on your income and tax liability.
Thanks for the information Sreekanth 🙂
hi sir, im jyothi i have apply for epf claim form-19 & form10C my service is below 2 years my amount is above 52000, my pan not taken in uan like not matched, but i linked pan with bank account number to nearest my bank branch, in bank they updated KYC like my pan. now shall i applied for epf claim without pan it is possible or not sir.
Dear jyothi,
Yes, you can withdraw your EPF but TDS can be deducted. Also, your entire EPF claim amount is a taxable income.
Kindly read : EPF Claim & Tax implications..
Hi Sir,
I am Poonam I have claimed my EPF amount on 5-7-2019, but my PAN number is not linked with my EPF account, my service period was six years i.e., July 2013 to April 2019.
Employee Share is Rs.58,344 , Employer share is Rs.17,842 and Pension contribution is Rs.34,946.
I claimed the Form 19 and Form 10C.
Can I apply for Form 15G once the amount get credited in my Bank account ?
Dear POONAM,
Yes, you can immediately submit the Form 15G to the respective EPFO regional office.
But, do note that EPF withdrawal after 5 year service period is tax-exempt (even if epfo deducts tds, you can claim it in your ITR).
Related articles :
* EPF Interest Income & Withdrawals | Tax Implications | Is EPF Interest taxable?
* Tax Implications of EPF, PPF & NPS Withdrawals (Full / Partial) & Maturity proceeds
Thank you Sir for your response
Employers signature is required on Form 15G and on a photo copy of PAN Card?
Its not required.. You can self-attest them..
My PF claim was rejected online. Reason not mentioned clearly for PF amount but when I visited https://passbook.epfindia.gov.in/MemClaimStatusUAN/ for pension amount it was mentioned as “has been rejected due to :- F/13 TO TRANSFER FOR SUBSEQUENT SERVICE OF…” and no mention of reason for PF amount.
My current company has created a new uan and PF number and asking not to transfer service and only to withdraw claim amount from previous company. But it was rejected when I raised online.
Will it be due to the fact that I’m still working? Or I doubt may be only mistake is my second name in bank account is missing when compared to aadhar.
Dear Gowtham,
Is your previous UAN linked to your Aadhaar?
Download UMANG app in your mobile using play store
Then login using UAN number and click on get OTP
View your eff pass book after that try to claim it again form 19 and form 10c one after other
I recently withdrew my PF Advance for illness in company where my total service was more than 5 years. The total amount claim was about 50,000 on EPFO site but only 40,000 got credited. Can you please help on why amount deducted when service was more than 5 yrs.
Dear Sanket,
Service period is not an eligibility criteria for Partial claim towards medical treatment.
“For the purpose of ‘medical treatment’, the least of 6 months basic wages (or) employee share with interest is allowed as partial withdrawal.””
yes i know sir … but why i didn’t get total amount of claim ? 🙁
Hi…. Shreekanth
I am working in contract based company…. I have 3 year bond with company…. So 5 years service is not possible…. Does TDS system apply on me too…. Even though I don’t have any options?
Dear Mahesh ..Yes, same rules are applicable on your EPF withdrawal..
Hi Sreekanth,
For online withdrawal, where should I submit the form 15g as there is no option to do it online. Should I submit by visiting the nearest pf office.? Please clarify. Thanks.
Dear Shiva,
As soon as you submit online Claim request, immediately (next day) you can visit EPFO office and submit Filled Form 15G, PAN card copy, Aadhaar card copy & Claim acknowledgement copy to them. Kindly quote your UAN & Claim Id ref no.
Thanks Sreekanth. Appreciate your quick response.