New Provident Fund (PF) Withdrawal Rules: Presenting the Union Budget 2023, Finance Minister Nirmala Sitharaman proposed to reduce the Tax Deducted at Source (TDS) for the taxable component of Employees’ Provident Fund (EPF) from 30 per cent to 20 per cent. Gave. Scheme for non-PAN cases. However, other income tax rules will remain the same. As per income tax rules, if a PF or EPF account holder goes for his EPF withdrawal before the completion of 5 years of account opening, then in that case, the entire withdrawal amount will be taxable and the above PF contribution 2.5 lakh per annum will also be taxable.
“TDS rate on withdrawal of taxable component from employees at present” Provident Fund The scheme is 30 per cent in non-PAN cases. It is proposed to be reduced to 20 per cent as in other non-PAN cases.” nirmala sitharaman He said while presenting the Union Budget in the Parliament.
Simplifying the new PF withdrawal rule for non-PAN cases, Mumbai-based tax expert Balwant Jain said, “PF withdrawal is taxable if the withdrawal is made before five years of opening the PF or EPF account. PAN card, then no TDS will be levied on the withdrawal amount.PF withdrawal amount will be added to the total taxable income of the PF account holder in the year of withdrawal and tax will be applicable based on the income tax slab applicable to the PF account holder. “
However, Balwant Jain said that in case the PF account is not linked with the PAN card of the account holder, TDS is deducted from the account. Net Amount available in one’s PF account. This TDS rate, which is currently 30 per cent of the PF withdrawal amount, will come down to 20 per cent from April 1, 2023, or the beginning of FY24.
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