PF withdrawal: This step will show you how to keep away from TDS deduction
PF withdrawal: Provident Fund or PF account is taken into account a retirement-oriented funding possibility however the Employees’ Provident fund Organisation (EPFO) permits PF withdrawal earlier than retirement too. However, if an EPFO member is withdrawing EPF or PF stability earlier than 5 years of account opening, in that case TDS (Tax Deduction at Source) turns into relevant. As per the PF withdrawal guidelines, if the EPF/PF account is hooked up with PAN, in that case price ofTDS deduction can be 10 per cent whereas within the case of EPF account not seeded with PAN, the TDS price will get doubled means 20 per cent. However, there are some sure instances through which a PF account holder withdrawing stability earlier than 5 years of account opening can keep away from TDS deduction on one’s PF or EPF stability withdrawal.
Speaking on how a EPFO subscriber can keep away from TDS deduction though the PF withdrawal is completed earlier than 5 years of account opening Pankaj Mathpal, Founder & CEO at Optima Money Managers stated, “If the PF withdrawal amount is less than ₹50,000, then there will be no TDS levied on one’s PF withdrawal. However, in case the PF amount withdrawn is above ₹50,000 then the TDS becomes applicable if one’s annual income is more than ₹2.5 lakh.”
Highlighting the case through which one can keep away from TDS deduction even when the PF withdrawal quantity is greater than ₹50,000; Kartik Jhaveri, Director — Wealth Management at Transcend Consultants stated, “If the PF account holder’s annual income is below ₹2.5 lakh, then in that case one can avoid TDS deduction by furnishing Form 15G or 15H.” He stated that by submitting Form 15G or Form 15H, the PF account holder turn into eligible for TDS exemption though its withdrawal quantity is greater than ₹50,000.
Asked in regards to the distinction in Form 15G and Form 15H Pankaj Mathpal of Optima Money Managers stated that Form 15G is for many who are under 60 years of age whereas Form 15H is for the senior residents.
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