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Unauthorized EPFO Withdrawal & TDS – What to Do When Your PF Account is Compromised!

Are you an EPF member who recently noticed a mysterious withdrawal and a corresponding 10% TDS deduction (under Section 192A) in your Form 26AS, despite never initiating a claim? You’re not alone! This alarming scenario, where your EPFO passbook shows zero withdrawals and no claims were ever made, points to a serious issue of unauthorized activity and raises significant tax implications.


This isn’t a joke – it’s a critical financial concern. We’re witnessing a new level of incompetence from EPFO, impacting innocent taxpayers. If your bank KYC status is also “failed” due to an incorrect IFSC code, and you haven’t received any funds, the situation is even more perplexing and urgent. This post outlines immediate steps and crucial considerations for navigating this EPFO nightmare.

Understanding the Unauthorized EPF Withdrawal & Its Impact

An unauthorized EPF withdrawal appearing in your Form 26AS is a major red flag. Form 26AS is your Annual Information Statement, a crucial document reflecting all tax-related transactions, including TDS. When it shows a PF withdrawal you didn’t make, it means:

  • Potential Fraud/Error: Someone, or some system error, has processed a withdrawal from your EPF account without your consent or knowledge.
  • TDS Liability: The 10% TDS under Section 192A is deducted on taxable PF withdrawals. If this withdrawal was unauthorized, you’re being wrongly assessed for income you never received.
  • Tax Return Complications: This erroneous entry in your Form 26AS directly impacts your income tax filing, potentially leading to discrepancies and notices from the Income Tax Department.
  • KYC Discrepancy: The “failed” bank KYC status due to an incorrect IFSC code further complicates matters, indicating that even if a legitimate withdrawal were initiated, the funds wouldn’t reach you.

Immediate Action Plan: What to Do Right Now

Given the urgency and potential tax implications, here’s a step-by-step guide:

  1. Verify All Records (You’ve done this, excellent!):
    • EPFO Member Portal: Re-confirm that no withdrawal claims were initiated from your end.
    • EPFO Passbook: Ensure it still shows zero withdrawals.
    • Form 26AS: Take screenshots or download the relevant section showing the unauthorized withdrawal and TDS. Note the exact date (Q2 FY 2024-25 in your case).
  2. Lodge a Grievance on EPFiGMS (Employees’ Provident Fund Grievance Management System):
    • You’ve already initiated this, which is the correct first step. Ensure your grievance is detailed, mentioning the unauthorized withdrawal, the TDS in Form 26AS, the lack of withdrawal history on EPFO’s site, and your failed KYC status due to the incorrect IFSC.
    • Crucial Tip: Keep a record of your grievance number and regularly check its status. EPFO’s response times can be slow (“geological time scale”), but consistent follow-up is essential.
  3. Contact Your Previous Employer (Regarding KYC):
    • Since your previous employer submitted the wrong IFSC code, contact their HR/Payroll department immediately. Request them to update your bank KYC details on the EPFO portal with the correct IFSC code. This is crucial for any future legitimate transactions and might be linked to the current issue.
  4. Prepare for Income Tax Implications:
    • Do NOT include the unauthorized withdrawal in your Income Tax Return (ITR) as income. You did not receive this money, and it’s a fraudulent transaction.
    • Document Everything: Gather all proof: screenshots of your EPFO passbook showing no withdrawals, proof of grievance lodged with EPFO, and any communication with your previous employer regarding KYC correction.
    • Add a Note in Your ITR: When filing your ITR, consider adding a clear note in the “Remarks” or “Explanations” section. State that the PF withdrawal appearing in your Form 26AS is erroneous and unauthorized, a grievance has been filed with EPFO (mention grievance number), and you have not received the funds. This provides upfront disclosure to the Income Tax Department.
    • Be Prepared for a Notice: The Income Tax Department operates by the “atomic clock,” and a mismatch between your ITR and Form 26AS will likely trigger a notice (e.g., under Section 143(1) for mismatch or even Section 139(9) for a defective return). Having all your documentation ready will be key to responding effectively.
  5. Escalate if EPFO Response is Slow:
    • If EPFO does not resolve your grievance within a reasonable timeframe (e.g., 30 days), consider escalating the matter.
    • EPFO Appellate Authority: Look for escalation matrix or appellate authority details on the EPFiGMS portal.
    • Public Grievances Portal (CPGRAMS): You can also escalate your grievance to the Ministry of Labour and Employment through the Centralized Public Grievance Redress and Monitoring System (CPGRAMS).
    • Income Tax e-Nivaran Portal: If the tax implications become immediate, you can also consider raising a grievance on the Income Tax e-Nivaran portal, specifically mentioning the erroneous TDS credit in Form 26AS due to an unauthorized EPFO withdrawal.

Why This Happens & How to Protect Yourself

While the exact reason for your specific unauthorized withdrawal is unclear, such incidents can stem from:

  • Data Entry Errors: Mistakes by employers or EPFO staff.
  • System Glitches: Software issues within EPFO’s portal.
  • Identity Theft/Fraud: Though less common for direct unauthorized withdrawals without receiving funds, it’s a possibility to be aware of.

To minimize future risks:

  • Regularly Check Form 26AS: Make it a habit to check your Form 26AS at least once a quarter, and definitely before filing your ITR.
  • Monitor EPFO Passbook: Periodically log in to the EPFO member portal and check your passbook for any unusual activity.
  • Keep KYC Updated: Ensure your bank account details, Aadhaar, and PAN are always correctly updated and approved on the EPFO portal.
  • Secure Your UAN Credentials: Never share your UAN, password, or OTP with anyone. EPFO or its staff will never ask for these details over messages or calls.