TDS on PF Withdrawals

TDS on PF Withdrawals भविष्य निधि से निकासियों पर टी.डी.एस.

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

RAJYA SABHA

UNSTARRED QUESTION No. 870

TO BE ANSWERED ON TUESDAY, THE 28th JULY, 2015

6, SHRAVANA, 1937 (SAKA)

TDS ON PF WITHDRAWALS

870. DR. PRADEEP KUMAR BALMUCHU:

Will the Minister of FINANCE be pleased to state:

(a) whether it is a fact that Government is planning to impose restrictions and levy tax on withdrawal of Provident Fund of an employee; and

(b) if so, the details thereof? 

ANSWER

MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI JAYANT SINHA)

(a) & (b) The Income-tax Act, 1961 since its enactment contained provisions for taxation of certain pre-mature withdrawals from the recognized provident fund, the procedure for computation of tax liability and the mechanism for deduction of tax thereon. With a view to obviate the difficulty faced by the trustees of the Employee’s Provident Fund Scheme, 1952 (EPFS) in obtaining the information about the employees for complying with the provisions relating to computation and deduction of tax on pre-mature withdrawal, a new section 192A has been inserted in the Income-tax Act, 1961 vide Finance Act, 2015 which provides for the simplified procedure for deduction of tax by the trustees of EPFS by specifying a flat rate of 10% for deduction of tax. However, for reducing the compliance burden and also for helping the small taxpayers, it has been provided that no deduction under this section shall be made if the payment is less than Rs. 30,000. Further, the existing facility available under the Income-tax Act for receiving payment without deduction of tax in appropriate cases by filing self declaration (Form 15G and Form 15H) has also been extended to these payments.

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