EPFO has created a new tax structure for PF contributions over a threshold of Rs 2.5 lakh for private-sector employees and Rs 5 lakh for government employees. The EPFO norms say that if TDS is less than Rs 5,000, there will be no deductions for Indian residents.
New Delhi: EPFO, the statutory body, has issued new taxation and deduction standards for employees’ retirement savings. If provident fund accounts are not in final settlement or transfers, EPFO specifies that tax deducted at source (TDS) will be implied on the date of the credit of interest on those accounts.
EPFO has established a new tax structure for PF contributions over a threshold of Rs 2.5 lakh for private-sector employees and Rs 5 lakh for government employees.
Meanwhile, TDS will be applied to PF final settlements, transfer claims on transfer from exempted establishments to EPFO, and vice versa, up to the aforesaid level.
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The rate of TDS that an employee will pay is one of the most important considerations. On their PF interests, however, not everyone will be required to pay TDS.
According to EPFO norms, if TDS is less than Rs 5,000, there will be no deductions for Indian residents; nonetheless, the member’s individual tax liability will stay the same.
The EPFO further specifies that the TDS rate will be 10% if a PF account is connected to a valid Permanent Account Number (PAN). However, if the TDS rate is not connected to a legitimate PAN, it is doubled to 20%.
If your PAN isn’t up to current or linked to your PF account, you’ll end up paying double the TDS rate than the usual 10%.
Every taxpayer who receives taxable income is required by section 206AA of the Income Tax Act to provide their PAN to the payer (EPFO).
Forms 26 Q and 27 Q of the Income Tax Act can be used to claim a TDS return. The deadline for filing a TDS return for the first quarter (April to June) is July 31 of the financial year; for the second quarter (July to September), the deadline is October 31; for the third quarter (October – December), the deadline is January 31; and for the fourth quarter (January – March), the deadline is May 31.
EPFO stated that if TDS returns are not filed, a penalty of Rs 200 is imposed for each day the failure continues. The amount of costs, however, will not exceed the amount of TDS. The deadlines for filing TDS statement fees coincide with the deadlines for filing TDS returns.
Read More: Operational guidelines for taxing EPF issued
Here’s how to link your PF account with PAN:
Step 1: To get started, go to your EPFO UAN Member e-Seva Portal and log in using your UAN number and password. A captcha code will appear below the password; you must enter the exact unique code in the box below it to complete the login process.
Step 2: Once you’ve logged in, go to the ‘Manage’ area of the main menu..
Step 3: Click KYC under the ‘Manage’ section. You’ll be taken to a page where you may add personal information like your bank account, PAN, Aadhaar, passport, driver’s licence, election card, ration card, and national population registry..
Step 4: Select the PAN section and enter your individual PAN number. Make careful to type your name exactly as it appears on your PAN card, then click Save.
Step 5: Your PAN is automatically confirmed if your name and number match the IT department’s data. Your PAN information will appear in your ‘Member Profile’ table once your PAN has been correctly linked with your PF account.
