Section 192A of the Income Tax Act: TDS on EPF Withdrawal

Section 192A of the Income Tax Act focuses on Tax Deducted at Source on a withdrawal amount from Employees' Provident Fund account.

This Section allows trustees of the EPF to deduct tax at source while making payment when employees fail to meet conditions specified under Rule, Part A of the Fourth Schedule.

Individuals can find specific guidelines for TDS to deduct from the withdrawal amount and additional vital information in the upcoming segment.

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Entities recognised under the Employees' Provident Fund Scheme who qualifies to pay employees the accumulated fund can deduct TDS in the following situations:

• TDS will be deducted when the payment made to the employee exceeds ₹ 50,000 during the time of withdrawal. Additionally, an individual has worked less than 5 years in a company. [Source]
• When an employee transfers his or her accumulated provident funds from old to a new PF account. This situation happens when he or she changes a company.
• Section 192A of the Income Tax Act is applicable when an employer terminates an employee due to the latter's physical illness. Other reasons include discontinuation of a business venture or a project in which that employee was working, etc. [Source]
• This Section 192A of the Income Tax Act applies when an individual withdraws more than ₹ 30,000. Additionally, he has working experience of less than 5 years in a corporation. [Source]
• The threshold limit for a deduction of TDS applies when the total withdrawal amount is above ₹ 50,000 [Source]

A deductor deducts 10% of TDS on the amount withdrawn from provident fund accounts. For that, account holders must submit their PAN cards. [Source]

If they provide Form 15H or 15G, deductors will not deduct TDS under Section 192A of the Income Tax Act. However, they will deduct TDS at the maximum marginal rate if an individual fails to furnish his or her PAN card. [Source]

Take a look at the following circumstances during which deductors do not deduct tax at source under Section 192A of the Income Tax Act:

• The withdrawal amount from an EPF account is below ₹ 50,000.
• An individual withdraws an amount from EPF after rendering 5 years of consistent service.
• An individual furnishes Form 15H or Form 15G, along with his or her PAN card. [Source]

Thus, individuals must carefully go through these pointers about Section 192A of the Income Tax Act. Knowing about this Section will allow them to understand the withdrawal process and reduce TDS deduction. This will lower their tax burden and maximise their savings.