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EPF or Employee’s Provident Fund is taxable if withdrawn before you complete 5 years of service.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.
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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 want to withdraw around Rs.200000/- from my EPF account on an urgent basis. While doing the same through online,Ii can see that my PAN is not verified though my Aaadhar card is verified. My company has already verified my PAN card but it is not showing in the portal. Is it mandatory to verify the same before applying? Though PAN number is provided. are they going to deduct TDS from their? please advise.
Hi!
Yes, it is important that you verify your PAN details before applying for PF withdrawal if you wish to pay less TDS. If your PAN details remain unverified at the time of PF withdrawal, you will be liable for a TDS of 30%, which otherwise, will be 10%.
Even I am facing the same issue. Update your Aadhar number in EPFO website to be on safer side. My name in UAN, PAN and Aadhar are all correct but only the name in income tax department is different because of which I am also getting the same error which you are getting. Several people are facing this issue.
Hi,
It is mandatory that all your personal details are similar and verified before you apply for PF withdrawal. Kindly get your details rectified with the Income tax department in order to proceed with the withdrawal process.
My service is more than 5 years and now the EPF amount is also more than 2.5 Lakh. Whether the TDS will be deducted?
Also what amount should I write at total income for assessment year so that the TDS will not be deducted.
Hi
PF withdrawals that are made after completion of 5 years of continuous service are tax-free.
Hi,
I have applied PF full & final settlement in PF Portal without verify PAN and the total claim amount is nearly 1,30,000/-
I have PAN Card and i have verified in PF portal but it is showing that employer verification is pending & I already applied PF,I have checked in online that if PAN is not verified while applying PF TDS will deducted.
Please tell me what should i do.
Hi,
In this case, you need to get in touch with your employer and ask him to verify your details. It is only then that you will be eligible to withdraw your PF without getting TDS deducted.
Hi All,
Please clear this doubt every time i seek assistance they give a different picture….Here is the scenario, I have completed over 15years of continuous service and the UAN portal was updated with PAN and AADHAR details, while verifying PAn, there is an error Name doesnt match, so If I opt for Partial withdrawl of PF for House Construction will i be deducted TDS?
Please provide an accurate information.
Thanks,
Dev
Hi,
You first need to verify your PAN details, by checking with your employer or with the income tax department about rectifying your name. Once your PAN details are verified, you can withdraw the amount at a TDS of 10%. However, if your PAN details are not verified, you will be liable for tax deduction at source of 30%.