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Tds on premature pf withdrawal

Varma (Senior Process Executive) (305 Points)

26 October 2015

Hi all my uncle had worked in a corporate company for four & half years and resigned 2 years back. He had withdrawn his PF in Mar 2015(FY 2014-15). Since his resignation he not employed and there is no income from any source. He had mentioned everything while applying for PF. And the PF amount received is around 29,000 after 30% TDS deduction. I would like to know how/why the company had deducted 30% TDS. And also would like to know the correct TDS? Is there any possibility to take action against such company or TDS validator?

Thanks in Advance

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3 Replies

Vikas Gupta (Tax Executive) (530 Points)
Replied 28 October 2015

As per PF Amendment Rules, The Finance Act, 2015 has inserted a new section 192A regarding payment of accumulated provident fund due to employee. According to it if employee withdraws Rs. 30000/- or more with service less than five years,TDS will be deducted agst such payment @ 10% (if PAN or Form 15G/15H is provided) or @ 34.608% (in other cases).

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Miss Rinkal (Student) (1309 Points)
Replied 28 October 2015

@ Varma:

The threshold limit of withdrawal of accumulated balance is 30000. I.e where the amount due to the payee exceeds 30000 then tds @ 10% will be made. Where PAN of the payee is not available or invalid pan then tds to be deducted @ 34.608%

However tax will not be deducted if form 15g/h as the case may be is submitted to the employer

Ruchi (CA) (1410 Points)
Replied 29 October 2015

Instead of taking action against the company or tds Validator, it would be better to file your income tax return and claim the excess tax deducted. The TDs would have been deducted validly and you would be involving yourself in unnecessary confusions and communications which might not result in any gain to you. so just file your return and claim ur refund.