The tax deducted would have been diminished to 20% from 30% for the non-PAN cases towards the withdrawals of the Employees’ Provident Fund (EPF). This circulation is for those people whose Permanent Account Number (PAN) is not revamped with the records in the Employees’ Provident Fund Organization (EPFO), the same announcement has been addressed in the Budget 2023 speech.
Current Law of TDS Rate on EPF Withdrawals
When the money would get withdrawn within five years of the opening of the EPF account, the tax deducted at source (TDS) shall get deducted on the withdrawal of EPF, as per the present income tax statute. When the withdrawal would get performed prior to 5 years of service then the same shall get deducted at 10%. With the highest slab rate of 30%, the TDS would get deducted, when the permanent account number (PAN) does not been furnished for the case of employment service of fewer than 5 years.
No TDS would get levied for the case when the whole amount withdrawn is not more than Rs 50,000 for a service of fewer than 5 years.
This TDS can be ignored through filing Form 15G or 15H for senior citizens for the EPF account holders withdrawing an exceeding amount of Rs 50,000, considering the income is less than Rs 2.5 lakh. A PAN should be held by the subscribers for applying to these forms. With the help of the websites of the banks, the same forms would also get submitted as permitted by some banks.
TDS Rate for Non-PAN Holders on EPF Withdrawals
The rate of TDS shall drop down to 20% for the case when the EPF account does not get seeded with the account holder’s PAN card from 1st April 2023 or from the start of the Fiscal year 2024.
Read Also: Full Guide to New Tax Rule on TDS Deduction on EPF Interest
Procedure to Withdraw the Money from EPF Accounts
An online claim could be performed by the subscribers to withdraw money from EPF. To get the approval the same claim would get forwarded to the employer. The amount would get credited to the account of the subscribers in 10 days after getting approval.
The contribution of the employee is 12% of their salaries in the EPF accounts and also the employers contribute the identical amount. On the website, the subscribers are permitted by the Employees’ Provident Fund Organization (EPFO) to see their balance online. A facility for informing the balance information is also been provided through SMS service and a missed call by EPFO.
