Introduction to Section 192A:
- Section 192A of Income Tax Act is applicable on the TDS on premature withdrawal from Employee Provident Fund.
- Section 192A of Income Tax Act is directs the Employees’ Provident Fund Scheme, 1952 to deduct TDS when employees do not meet the provisions mentioned under Rule 8, Part A of the Fourth Schedule.
- Section 192A of Income Tax Act was recently added to the Income Tax Act, 1961 under the purview of the Finance Act, 2015
Time of Deduction of TDS:
TDS is deductible, if the following conditions are satisfied –
- The amount from EPF has been withdrawn before completion of continuous 5 years of service.
- The amount withdrawn is more than INR 50,000.
- The Deductor is required to deduct TDS at the time of payment of the accumulated balance due to the employee
Exceptions to TDS applicability:
TDS is not applicable in the following Conditions are satisfied
- The amount from EPF has been withdrawn completion of continuous 5 years of service
- The EPF amount withdrawn is less than INR 50,000
- In the event of a job change, the EPF amount has been transferred from one account to another.
- You can submit Form 15G/Form15H if tax on your total income including EPF withdrawal is nil. TDS is not deducted if Form 15G/Form 15H is submitted.
TDS Rate on PF Withdrawal:
- Under TDS Section 192A the entity deducts tax at source at the rate of 10%.
- However, one must note that if an employee is unable to provide PAN, then the entity deducts TDS at the marginal rate, i.e. 34.608%.
Due date of TDS deposit and Filing of TDS returns:
The Deductor is liable to deposit TDS with the Government with following dates
| Particulars | Due date of Deposite |
|---|---|
| April-February | 7th of Next following next Month |
| March month | 30th April |
The Deductor is liable to File TDS Returns with the Government with following dates
| Quarter | Due Date for Return |
|---|---|
| April to June | 31st of July |
| July to September | 31st of October |
| October to December | 31st of October |
| January to March | 31st of May |
Some Scenarios in EPF Withdrawal:
| The employee has not completed 5 years of service and withdraws more than INR 50,000 from EPF account | TDS would be levied |
|---|---|
| The employee has not completed 5 years of service and withdraws less than INR 50,000 from EPF account | No TDS would be levied |
| The employee has completed 5 years of service and withdraws more than INR 50,000 from EPF account | No TDS would be levied |
| The employee has completed 5 years of service and withdraws less than INR 50,000 from EPF account | No TDS would be levied |
When PAN submission is not Required?
Submission of PAN (Permanent Account Number) is not mandatory when a PF account holder has served in an organization for more than 5 years. In this case, he/she does not have to submit Form 15G and 15H as well. Besides, PF account holders whose employments have been terminated due to by ill- health or any other reasons such as discontinuance of business or project completion, they are also not required to submit PAN. For them, no tax will be deducted at source.
