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You are here: Home / EPFO NEWS / Amendment in Section 192A of the IT Act, 1961- Instructions for deduction of TDS on withdrawal from PF
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Amendment in Section 192A of the IT Act, 1961- Instructions for deduction of TDS on withdrawal from PF

June 3, 2015 rajasinghmurugesan

Amendment in Section 192A of the IT Act, 1961- Instructions for deduction of TDS on withdrawal from PF

Employees’ Provident Fund Organisation
(Ministry of Labour & Employment, Govt. of India)
Head Office
Bhavishya Nidhi Bhawan, 14-Bhikaji Cama Place, New Delhi – 110066
Phone: 011 – 26172685, Fax: 011-26173022, e-mail: [email protected]

No. WSU/6(1)2011/IT/Vol-IV/5931

Date: 21 May 2015

To
All Addl. CPFC (Zones)
All RPFC/OIC of
ROs/SROs.

Sub: Amendment in Section 192A of the IT Act, 1961- Instructions for deduction of TDS on withdrawal from PF.
Ref: Head Office circular of even number dated 18.03.2015.

Sir/Madam,

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 1st June, 2015. A copy of the said provision is enclosed for information.

2. Income Tax shall be deducted at source (TDS) at the following rates if at the time of payment of the accumulated PF balance is more than or equal to Rs. 30,000/-, with service less than 5 years:-

a) TDS will be deducted @ 10% provided PAN is submitted. In case Form No. 15G or 15H is submitted by the member, then no TDS shall be deducted.

b) TDS will be deducted @ minimum marginal rate (i.e. 34.608%) if a member fails to submit PAN (and no Form No 15G or 15H).

3. TDS shall not be deducted in respect of the following cases:-

 Transfer of PF from one account to another PF account.
 Termination of service due to ill health of member, discontinuation/contraction of business by employer, completion of project or other cause beyond the control of the member.
 If employee withdraws PF after a period of five years of continuous service, including service with former employer.
 If PF payment is less than Rs. 30,000/- but the member has rendered service of less than 5 years.
 If employee withdraws amount more than or equal to Rs. 30,000/-, with service less than 5 years but submits Form 15G/15H along with their PAN

A flow-chart is appended for understanding the implications of the amended provisions in the Income Tax Act, 1961.

4. Kindly take note that TDS is deductible at the time of payment of provident fund in Form No. 19. Form No. 15H is for senior citizens (60 years & above) while Form No. 15G is for individuals having no taxable income. Form 15G & 15H are self-declarations and may be accepted as such in duplicate. Form 15G and 15H may not be accepted if amount of withdrawal is more than Rs. 2,50,000/- and Rs. 3,00,000/- respectively. Members shall quote PAN in Form No. 15G/15H and in Form No. 19. The field offices may purchase pre-printed Form No. 15G & 15H to assist the members in filling up Form No. 19.

5. The process for authorization of Form No. 19 shall be as per the existing system. However, whenever TDS has to be deducted @10%, the same may be approved on Form No. 19 by the APFC (Accounts). Wherever the TDS has to be deducted @34.608%, the same may be approved on Form No. 19 by a RPFC level officer. These instructions shall apply in initial stages of implementation of the amended income tax provisions. Since the members may not be aware of the new provisions, therefore, it shall be the responsibility of SSA (Accounts) to communicate the same to the member on telephone and record the same in Form No. 19 to submit PAN, Form No. 15G/15H, if applicable. A system generated statement of Tax Deducted at Source (TDS) may invariably be sent to the member.

6. 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 alongwith Form No. 19. In such cases, no income tax (TDS) shall be deducted in terms of Rule 8 of Fourth Schedule to the Income Tax Act, 1961.

7. The field offices shall deposit the Tax Deducted at Source (TDS) and returns thereof by 7th of the following month. The existing TAN number obtained the respective offices may be used to deposit tax to the local income tax authority. The in-house responsibility for deposit of tax and returns thereof shall be with Drawing & Disbursing Officer (DDO) as per the existing system. The concerned officers and staff may be given an in-house training for implementation of new provisions and RPFCs may engage CAs, who are on our panel.

8. The above should be made applicable with effect from 01.06.2015 and all steps should be taken before hand such as procuring copies of Form 15G and 15H. In case of any clarification, the same may be escalated to the Head Office.

Yours faithfully,

(Sanjay Kumar)
FA&CAO

source-Employees’ Provident Fund Organisation

Related posts:

  1. TDS deduction under section 194A of the Income-tax Act, 1961 in case of Senior Citizens
  2. Requirement of tax deduction at source in case of entities whose income is exempted under Section 10 of the Income-tax Act, 1961 – Exemption thereof
  3. Circular C1 of 2020 : Clarification in respect of option under section 115BAC of the Income-tax Act, 1961
  4. ECHS for Section 80D of Income Tax Act, 1961 for the A.Y. 2019-20 & subsequent assessment years
  5. CBDT : Order u/s 119 of The Income Tax Act, 1961 on issue of certificates for lower rate/nil deduction/collection of TDS or TCS u/s 195, 197 & 206C (9)
  6. Issuance of certificate for lower rate/nil deduction/collection of TDS/TCS u/s 195,197 & 206C (9) of the Income-tax Act. 1961
  7. CBDT – Order under Section 119(2)(a) of the Income-tax Act, 1961
  8. Clarification in respect of residency under section 6 of the Income-tax Act, 1961 – CBDT
  9. Deduction of TDS at the time payment of quarterly interest from SCSS accounts, withdrawal from NSS-87 accounts, Payment of Commission to Agents and issue of TDS Certificate in Form I6A
  10. Deduction of Income Tax on withdrawal of P.F. 60%
  11. Clarification in respect of residency under section 6 of the Income-tax Act, 1961 – PIB
  12. CBDT : Processing of returns with refund claims under section 143(1) of the Income-tax Act,1961
  13. Withdrawal from the provident fund to facilitate housing needs of workers Gazette Notification on amendment in EPF Scheme
  14. Government Sets-Up A Committee to Simplify The Provisions of The Income Tax Act, 1961
  15. INCOME-TAX DEDUCTION FROM SALARIES DURING THE FINANCIAL YEAR 2014-15
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  17. Deduction of Income Tax at the time of making payment – CPAO
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Filed Under: EPFO NEWS June 3, 2015 1 Comment

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Comments

  1. VBS Shekharan says

    June 3, 2015 at 7:14 pm

    This was the only Saving that motivated employees to contribute as much as possible due to the only reason known to me was that This Investment was tax Free. & good rate of interest paid on this contribution.
    Secondly that was the main reason behind any employee to continue working in any Pvt organization for longer period despite all odds.
    Now this amendment will not only demotivate employees. They will also decline in investing more than the compulsory Deduction.
    Thirdly Employers are also going face problem in retaining their good employee from continuing to work more than 4 to 4.5 years due to fear TDS which is amounting more than the rate of Interest they get on their hard earned Money.

    Reply

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