PAN is required during EPF withdrawal/settlement if you do not want some excess tax to be deducted from your EPF account. If you fail to submit PAN, the tax deducted at source (TDS) can be as high as 34.6%.
Is EPF withdrawal taxable?
EPF or Employee’s Provident Fund is taxable if withdrawn before you complete 5 years of service. These 5 years do not have to be with the same employer and they do not have to be continuous. However, you have to complete the same before your EPF balance can be tax-free.
Don’t Know your Credit Score? Now Get it for FREE Check Now
How much tax is payable on EPF?
If you withdraw your EPF before completing 5 years of service, the withdrawal is taxable as follows:
- The interest paid on the EPF is taxable at your slab rate
- The Employer and Employee contributions are taxable at your slab rate. This is because the deduction given to EPF contributions in previous years is reversed. These contributions now become taxable.
What if excess tax is deducted?
If you fail to furnish PAN and tax is deducted at 34.6% or any other rate higher than your slab rate, you can claim a refund from the Income Tax Department. However, refunds are paid after filing income tax returns at the end of the financial year and there are often delays in paying these refunds.
PAN for EPF Partial Withdrawals
PAN is not required for partial withdrawal or advances under Para 68 of the Scheme. These are withdrawals/advances for medical treatment, purchase of house and education/marriage of children. You can find out more about them here.
PAN for EPF Full Withdrawals
For full settlement cases, TDS would be deducted if the total amount is more than ₹50,000/- and service period is less than 5 years. The TDS amount changes according to whether you have given PAN. Full withdrawal due to unemployment of two months or more would come under this category. The following conditions apply:
- If your withdrawal is between 50,000 and Rs 2.5 lakh, no TDS would be cut if PAN is provided or Form 15G/H is submitted (if applicable). Form 15 H/G apply if your income is below the taxable limit of 2,50,000.
- For amounts, more than 2.5 lakh TDS would be deducted at 10% if PAN is provided
- For amounts greater than 2.5 lakh, if PAN is not provided, TDS would be deducted at the maximum marginal rate of 34.608%.
- Note: There is no TDS if your service is more than 5 years or amount is less than ₹50,000 and hence you do not need to submit PAN in this case.
PAN is an important KYC document for online settlement also due to the reasons stated above. You can update PAN details through the unified member portal or through the UMANG App while applying for settlement.
83 Comments
I have worked for only 5 months till now and my epf amount is less than fifty thousand because I am a fresher. Do I need to fill up 15g form or will tds be deducted?
Hi Ankit,
If your withdrawal is between 50,000 and Rs 2.5 lakh, no TDS would be cut if PAN is provided or Form 15G/H is submitted (if applicable). Form 15 H/G applies if your income is below the taxable limit of 2,50,000.
Is 15g form is necessary for withdrawal less than 50000 and service also less than 5 years?
Hi Anand,
In case, you wish to withdraw your EPF amount which is more than or equal to Rs. 50, 000 with less than 5 years of service. 1) TDS is deducted at 10% if you submit the PAN Card (But the 15G form for EPF/15H is not submitted).
My pan card is verified in UAN portal but pf withdrawal claim rejected and show reason that (pan card not submited by membar).what i do now..?
Hi Partha, as per the rules, to withdraw your EPF your Aadhaar Card must also be linked to UAN. Please link your Aadhaar Card with UAN to proceed further.
I have completed more than 5 years of service and my withdrawal is more than 50,000/- . Do I need to verify PAN? to avoid 34.65% tax??
Hi Radha,
Yes, it is mandatory to verify PAN to avoid a 34.65% tax.
i have completed 6 and 1/2 year and left the job, i want to withdraw the total PF amount will it be taxable.
do i have to submit form 15G? please advise
Hi Manish,
In case, you wish to withdraw your EPF amount which is more than or equal to Rs.50, 000 with less than 5 years of service then TDS is deducted at 10% if you submit the PAN Card (But 15G form for EPF/15H is not submitted) or TDS will be deducted at the rate of 34.608% if you fail to submit the PAN Card. (Also Form 15G/15H is not submitted). However, you are required to furnish 15G to avoid tax dedcutions.