TDS on EPF Withdrawal::

TDS is deductible on withdrawal of the accumulated balance if the amount is not exempt in the hands of the employee. (above 4 cases)

TDS is not deductible if the aggregate amount of withdrawal is less than Rs. 50,000/-. It is deductible at the rate of 10%. If PAN is not available then TDS will be 35.880% for the A.Y 2019-2020.

Computation of Taxability on Withdrawal :

The credit balance in the provident fund account consists of employer’s contribution, interest on employer’s contribution, employee’s contribution and interest on employee’s contribution.

The taxability of each such item is as below:

The employee can save his tax by transferring the accumulated balance of EPF with the new employer if he also maintains the recognized provident fund rather than withdrawing the same.

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Ankit Shetty

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