There are some changes to Tax Deducted at Source (TDS) applicable on EPF. Let us look at the major changes –
Here is a flowchart explaining the TDS rules on withdrawal –
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PPF
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Employer contribution is not there
A person’s contribution is eligible for Tax deduction Interest credited is exempt from tax. Maturity amount received at the end of service period is exempt from tax. |
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Unrecognized PF
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Employer’s contribution is exempt from tax.
Employee Contribution is NOT eligible for Tax deduction u/s 80S Interest credited is exempt from tax. Maturity amount received at the end of service period is exempt from tax subject to certain conditions. |
The main change is that earlier you were responsible for paying tax if applicable on EPF. But now it is deducted at source. You can avoid TDS on EPF by not withdrawing the amount prematurely. If you have to withdraw then you should fill the 15G or 15H form as applicable.
TDS is applicable on EPF in conditions such as withdrawal of amount>= Rs. 30,000 and within 5 years. It can be avoided by not withdrawing prematurely or submitting forms 15G or 15H if applicable.
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Statutory PF
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Employer’s contribution is exempt from tax.
Employee Contribution is eligible for Tax deduction u/s 80S Interest credited is exempt from tax. Maturity amount received at the end of service period is exempt from tax. |
Many employees use the Employee Provident Fund (EPF) as a too to accumulate money. There have been some changes to the EPF withdrawal rules which you can check out here. There are different taxation rules on different provident funds. Here is a brief overview on that –
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Recognized PF
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Employer’s contribution is exempt from tax up to 12% of salary.
Employee Contribution is eligible for Tax deduction u/s 80S Interest credited is exempt from tax up to 9.5% Maturity amount received at the end of service period is exempt from tax under certain conditions which are detailed below. |
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Executive Summary – There have been some updates to the taxation on EPF withdrawal rules. Tax is deducted at source for withdrawal of EPF in certain conditions. There are ways to avoid the tax like not withdrawing it prematurely or submitting forms 15G or 15H if applicable.
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Type of PF
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Details
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