192 a of income tax act
Section 192A – TDS on Premature Withdrawal of EPF
Section 192A of the Income Tax Act, 1961, deals with the deduction of Tax Deducted at Source (TDS) on premature withdrawals from the Employee Provident Fund (EPF) account. Here’s a concise overview:
1. Applicability:
This section applies to individuals who withdraw funds from their EPF account before completing five years of continuous service. It is essential for both employees and employers to understand the implications of Section 192A.
2. TDS Rate:
Under Section 192A, if an individual withdraws more than Rs. 50,000 from their EPF account before the completion of five years of service, TDS is applicable. The TDS rate is 10% if the Permanent Account Number (PAN) is provided, and 30% if PAN is not provided.
3. Threshold Limit:
The threshold limit of Rs. 50,000 is cumulative for all EPF accounts held by the employee with different employers. If the total withdrawal amount exceeds this threshold, TDS is deducted.
4. Filing Form 15G/15H:
Individuals whose total income is below the taxable limit can submit Form 15G (for individuals below 60 years of age) or Form 15H (for senior citizens) to the EPFO (Employees’ Provident Fund Organization). If these forms are accepted, TDS will not be deducted.
5. Procedure for TDS Deduction:
When TDS is applicable, the EPFO will deduct the applicable TDS amount before releasing the EPF withdrawal amount to the individual. The deducted TDS is deposited with the government on behalf of the taxpayer.
6. Reporting TDS:
The EPFO issues Form 16 (TDS Certificate) to the individual, which includes details of the TDS deducted. This certificate can be used to claim a refund or adjust the TDS amount while filing the income tax return.
7. Claiming Refund:
If the individual’s total income is below the taxable limit or if they are eligible for a lower tax rate due to deductions and exemptions, they can claim a refund of the TDS amount by filing an income tax return.
In summary, Section 192A of the Income Tax Act mandates the deduction of TDS on premature withdrawals from the Employee Provident Fund. It is crucial for individuals to be aware of this provision, especially when withdrawing funds from their EPF account before completing five years of service, and to ensure proper compliance with income tax regulations.,
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192 a of income tax act
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192 a of income tax act
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