TDS on withdrwal of EPF under section 192A wef 01.06.2015

by
192a

The Finance Act 2015 has come up with a new section 192a. This is nothing but related to TDS that is imposed on the payment of accumulated provident fund balance as per the employees which are imposed from 01.06.2015.

According to this, the income tax will be applicable as given here. If in case the payment of the accumulated PF balance is expected to exceed Rs. 30000/- then the service will be below 5 years and is as follows:

  1. In this case, the TDS will be applicable @ 10% where the individuals need to provide PAN. If in case you are interested to provide Form No. 15G or 15H in such cases you will be free from TDS.
  2. The TDS will be applied at the maximum marginal rate if and only if you refuse to provide PAN.
Read: All you need to know about TDS

The TDS is applicable in the following cases:

  • In case the individual would like to get back the PF after 5 years of continuous service that is also included with former employee service.
  • In case the PF payment is below Rs. 30,000/- and then the limit has been extended to 50000 wef 01.06.2016 but still, the individual has rendered service of less than 5 Years.
  • If you would like to discontinue the service due to the following reasons,
  • Bad health conditions of the individual.
  • Discontinuing of business by the employer.
  • Or any other reason exceeding the control of an individual.
  • Heavy completion regarding the project.
  • As per the section 192a if the individual is interested to draw an amount which is equal or more than Rs, 30000. In such cases the limit would be extended to 50000 wef 01.06.2016) where the service will be below 5 years and is applicable by providing Form I5G/15H and the PAN card.
  • If in case you would like to transfer the PF from one account to another.

Therefore, it is essential that the individuals should clearly examine the implementation of the amended provisions in the Income Tax Act 1961. It is even important to have a close examination in the 192a tds which has been deduced only at the time of payment of provident fund in Form No. 19_ Form No. 19.Form no 15H is for senior citizen(60 years & above). On the other hand, the form 15G he is applicable only for people is not eligible for taxable income.

If you could consider form 15G & 15H are considered to be self-declaration and are accepted only in case of publications. This form is not applicable if in case the amount of withdrawal is more than RS. 2.50,000/- and Rs. 3,00,000. In success that individuals should quote PAN in 15G./15H.

Moreover, the individuals who have been continuously using the service for 5 years or more than 5 along with the sentence with a former employer is not required to provide the details of PAN as well as Form No. I5G/15H. In the same way, the individuals possessing terminated service due to any reason such as bad health condition, the contraction for discontinuing of an organization, or any other reason which has been beyond the control of the individuals are never required to provide either PAN or Form No, 15G 15H. In this scenario income tax will not be applicable as per the rule 8 provided in the Fourth Schedule to the Income Tax Act, 1961.

Read: Section 194J – Fees for professional or technical services

INCOME TAX ACT, 1961 RULE 8 FOURTH SCHEDULE  PART A: RECOGNISED PROVIDENT FUNDS

As per the 192a of income tax act, the overall balance view and becoming payable for an individual who is active in a recognized prudential fund can be deduced from the computation of their overall income.

  • If the individual has been continuously using the service for 5 or more than 5 years.
  • If in case there is a cessation on the employment of the individual where the employees should get employment through any other employees requesting to extend the accumulated balance due and becoming payable to the individual please directly transferred to the individuals’ account. This case is applicable if and only if there is any recognized provident fund being active by any other employee.
  • If in case the individual has not been using the service and if in case the service has been terminated due to reasons such as bad health condition, contraction or discontinuation of the individual’s organization or any other reason that could be beyond the control of the individual employee.

Brief Description

If you could consider both the accumulated balance should you as well as the amount to be paid by the individual with respect to the recognized provident fund that has been maintained by the employer will be included with any amount that is transferred from the individual account. If in case any other recognized problem shall fund for fund maintained by the present employer or employers will be then considered as in computing for a particular time duration of continuous services that are accepted by the clause (I) or clause (Ii). In these cases, the individuals need to make use of the service continues with respect to the former employer or employers where aforesaid can also be a part of it.

TDS will not be applicable in the following scenarios:

Service is discontinued due to a bad health condition, discontinuing of the organization by an individual, or any other reason exceeding the control of an individual.

  • The employee’s withdrawal Rs. 30,000 or more than that with service less than 5 years but still provides Form 156/151-f as well as PAN card.
  • If in case the Prudential fund has been transferred from one account to another.
  • The provident fund is less than 30,1001 and still, the individual has rendered the service continuously for 5 years.
  • If FF is withdrawn after 5 years.

TDS will be Applicable in the following Scenarios:

  • If and only if the individual is interested to draw an amount of Rs. 30000/- for more than that with service for less than 5 years.
  • The TDS will be applicable as kb 10% if Form-15G/151-1 is not submitted but PAN is provided.
  • The overall TDS deduction depends upon the maximum marginal rate which is 34.608% and is applicable only if the individual does not provide PAN details.

Notes:

  • TDS follows section 192a of income tax act, 1951.
  • The individuals about 60 years can use Form 15H and Form 15G is for the individuals who do not have any taxable income whereas Form 15G & 15H is applicable for self-declaration and can also be accepted in case of publications.
  • The individuals we should provide PAN in Form No.- 15G or 15H.
  • TDS 192a is applicable only during the time of payment.