New PF withdrawal rule: PAN card holders should verify in FY24 throughout ITR submitting

New provident fund (PF) withdrawal rule: While presenting the Union Budget 2023, Finance Minister Nirmala Sitharaman proposed to lower Tax Deduction at Source (TDS) from 30 per cent to twenty per cent for taxable element of the Employees’ Provident Fund (EPF) Scheme for non-PAN instances. However, different revenue tax rule will stay identical. As per the revenue tax rule, if a PF or EPF accountholder goes for its EPF withdrawal earlier than completion of 5 years of account opening, then in that case, complete withdrawal quantity would stay taxable and PF contribution above ₹2.5 lakh every year would additionally stay taxable.

“At present the TDS rate on withdrawal of taxable component from Employees’ Provident Fund Scheme in non-PAN cases is 30 per cent. It is proposed to reduce it to 20 per cent, as in other non-PAN cases,” Nirmala Sitharaman had mentioned whereas presenting the Union Budget in parliament.

Simplifying the brand new PF withdrawal rule for non-PAN instances, Mumbai-based tax skilled Balwant Jain mentioned, “PF withdrawal is taxable if the withdrawal takes place before five years of PF or EPF account opening. If the PF account is seeded with account holders PAN card, then there will be no TDS levied on the withdrawal amount. PF withdrawal amount will get added to the total taxable income of the PF account holder in the year of withdrawal and the tax will become applicable on the basis of income tax slab getting applicable on the PF account holder.”

However, Balwant Jain mentioned that in case of PF account not seeded with account holders’ PAN card, TDS is deducted from the web quantity obtainable in a single’s PF account. This TDS fee is at the moment 30 per cent of the PF withdrawal quantity, which can come down to twenty per cent from 1st April 2023 or from the start of FY24.

Catch all of the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint.
Download The Mint News App to get Daily Market Updates.

More
Less

Topics