Are you trying to avoid tax in your PF withdrawal? It is vital for one to perceive a primary truth {that a} Provident Fund or PF account is seen as a retirement-oriented funding possibility, nevertheless, throughout an emergency, one can even choose for withdrawing PF earlier than the age of retirement.
But there’s a catch. EPFO permits withdrawal of PF earlier than retirement however in order for you to get the cash earlier than 5 years of account opening, then TDS (Tax Deduction at Source) is utilized on the withdrawal quantity. The PF withdrawal guidelines clearly state that if the EPF/PF account is connected with PAN, the TDS deduction charges stand at 10 p.c whereas within the case of EPF accounts with out PAN, the TDS charge stands at 20 p.c.
But there are exceptions too. In just a few instances, PF account holders can avoid TDS deduction whereas taking out cash earlier than 5 years of account opening.
Pankaj Mathpal, Founder & CEO at Optima Money Managers instructed Mint, “If the PF withdrawal amount is less than Rs 50,000, then there will be no TDS levied on one’s PF withdrawal. However, in case the PF amount withdrawn is above Rs 50,000 then the TDS becomes applicable if one’s annual income is more than Rs 2.5 lakh.”
You can even avoid TDS deduction even when the PF withdrawal quantity is over Rs 50,000; Kartik Jhaveri, Director — Wealth Management at Transcend Consultants instructed the web site, “If the PF account holder’s annual income is below Rs 2.5 lakh, then, in that case, one can avoid TDS deduction by furnishing Form 15G or 15H.”
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