How TDS will be deducted on Provident Fund withdrawal, when will tax have to be paid and when will you get exemption

Many times you have to pay tax on withdrawing your PF money from Employees’ Provident Fund Organization (EPFO). Although the investment made in it is tax free, but TDS (Tax Deduction at Source) is charged on the withdrawal made without following the rules.

Usually TDS is deducted on withdrawal of PF account within 5 years of opening, but apart from this there are many occasions when you have to pay TDS. We are telling you under which circumstances you can avoid TDS deduction, when you will have to pay tax.

TDS will not be deducted in these circumstances

On transfer of amount from one PF account to another.

  • On the death of the employee, termination of service due to illness or withdrawal after leaving the company. On withdrawal of money after 5 years of account opening. If less than 50 thousand is paid from PF account.

Here you have to pay tax

If 50 thousand or more amount is withdrawn within 5 years of account opening, then 10% TDS will be deducted.

If PAN is not given at the time of PF withdrawal, then TDS will be deducted at the rate of 34.60 percent.

TDS can also be deducted on giving Form 15G/15H on earning more than 2.5 lakhs annually, if the withdrawal is more than 50 thousand.