Excellent news for EPFO members about the new PF withdrawal rule! Be aware of the new regulations since just 20% TDS will be deducted on PF withdrawals going forward.

 Excellent news for EPFO members about the new PF withdrawal rule! Be aware of the new regulations since just 20% TDS will be deducted on PF withdrawals going forward.

In her budget speech on February 1st, Finance Minister Nirmala Sitharaman proposed a drop in the TDS rate on EPF withdrawal from the current 30% to 20% for non-PAN instances.

Salaried people whose PAN is not current in EPFO (Employees' Provident Fund Organization) records will benefit from this reduction in tax deducted on Employees' Provident Fund withdrawals.

On EPF withdrawals made within five years of account opening, TDS is taken into account in accordance with current income tax legislation. TDS is deducted at a rate of 10% if the withdrawal amount exceeds Rs 50,000 and PAN is on file with EPFO. The TDS rate was 30% for withdrawals, nevertheless, where a PAN was required or connected to an EPF account.

At this point, TDS is just 20% of the total. The low income category of salaried people will benefit from it. Under section 192A of the Income Tax, the second proviso has been eliminated.

According to the Budget 2023 memorandum, TDS is being deducted because many low-paid employees don't have PANs under section 192A in their circumstances, at the highest marginal rate. therefore, the Act's Section 1 The second proviso to section 192A is being suggested to be removed,


so that tax will be withheld at a rate of 20% in the event that the person fails to provide a PAN in relation to payment of the cumulative balance due. Instead of using the top marginal rate, see section 206AA of the Act. based on the percentage of cases that are not PAN.

To guarantee that no TDS is taken out of withdrawals from the EPF account, the holder of the account can submit Form 15H or Form 15G to the EPFO. For those under 60 and those above 60, respectively, use Form 15G and Form 15H.

A TDS certificate is sent to the taxpayer after the EPFO has deducted the TDS. To request a refund, if any, you can include a TDS certificate with your Income Tax Return (ITR).