PF Account-PAN linking can save TDS, Details here

The Employees’ Provident Fund Organisation rolled out new norms for taxation and deductions on the employees’ retirement accounts. The statutory body directed that tax deducted at source (TDS) will be levied on the date of the credit of interest on PF accounts if they are not in final settlement or transfers.

The body introduced a new tax structure on PF contributions exceeding Rs 2.5 lakh for private-sector employees, while keeping the limit for government employees at Rs 5 lakh. Exceeding the limit will attract TDS in case of PF final settlement, transfer claims on transfer from exempted establishments to EPFO, and vice versa.

However, taxpayers must know that not everyone would have to pay TDS. As per EPFO guidelines, a TDS amounting to Rs 5,000 will have no deductions for Indian residents, however, the member’s individual tax Liability towards his total tax shall remain.

Moreover, if an employee has linked their PF account with a valid Permanent Account Number (PAN), the TDS rate will be 10 per cent. If not, the TDS rate would be 20 per cent. Notably, an individual can claim a TDS return by filing forms 26 Q and 27 Q of the Income Tax.

If someone fails to file a TDS return, they will be fined Rs 200 each day during which the failure continues, with the amount of fees not going beyond the amount of TDS.

So, to not pay double the amount of TDS, individuals must link their PF account with PAN. Here’s how:

Step 1: Visit your EPFO UAN Member e-Seva Portal and log in using your UAN number along with your password.

Step 2: Once logged in, click on the ‘Manage’ section available on the main menu.

Step 3: Under the ‘Manage’ section, click on KYC. You will be directed to a page with options to add your personal information such as bank account, PAN, Aadhaar, passport, driving license, election card, ration card, and national population register.

Step 4: Select the PAN section and add your unique PAN number.

Step 5: If your name and number match with the IT department records, your PAN is verified automatically. your PAN and PF account are linked, you can find the PAN info in your ‘Member Profile’ table.

The new rules concerning TDS structure are applicable to government and private sector employees on their contributions for the previous year 2021-22 and subsequent previous years. TDS is the same for international workers as it is for Indian workers.

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