EPF Withdrawal becomes Taxable from June 1,2015

As per the latest amendment to the Finance Act 2015,tax would be deducted at source for PF Withdrawals.(Effective 1st June 2015). The tax is applicable only when the service is less than 5 years. If the employee had worked for more than 5 years in 2 or more companies then this tax is not applicable as the length of service is more than 5 years.

 TDS is applicable if:

  • Service is less than 5 years and
  • Payment of accumulated PF is more than or equal to INR 30,000

 TDS rates:

  • If PAN not submitted and 15G/15H not declared, TDS at maximum marginal rate 34.608%
  • If PAN alone is submitted, TDS at 10%

Scenarios for No TDS:

  • Transfer of PF from one account to another PF account
  • Termination of service due to ill-health or other causes beyond the control of the member
  • PF withdrawal after 5 years of continuous service (including service with former employer)
  • PF withdrawal is less than INR 30,000
  • Withdrawal more than INR 30,000 with service less than 5 years,  provided PAN is submitted and