What is TDS on EPF Withdrawal? 30% Income Tax if PAN Not Furnished
Mandatory TDS:
Under Section 192A of the Income Tax Act, TDS applies to EPF withdrawals made before 5 years of continuous service.
TDS Rates:
- 10%: If the withdrawal exceeds ₹50,000 and PAN is furnished.
- 30%: If PAN is not furnished, irrespective of the amount.
- Exemption: No TDS for withdrawals below ₹50,000.
Withdrawal Rules:
Employees can withdraw EPF in specific scenarios, including retirement, unemployment, medical emergencies, or home improvement. Partial withdrawals are subject to eligibility criteria.
Important Scenarios:
- Medical Needs: Up to 6 months’ basic wages or the employee’s contribution with interest.
- Education: For higher education after 7 years of service.
- Pre-Retirement: Up to 90% of the corpus can be withdrawn one year before retirement.
Why It Matters
Understanding EPF taxation and withdrawal rules is essential to avoid unnecessary tax burdens and plan financial decisions effectively.
🔗 Explore More on EPF Withdrawal Rules: EPF Guidelines
🔗 Latest Taxation Updates: Read Here
