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EPF or Employee’s Provident Fund is taxable if withdrawn before you complete 5 years of service.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
Hi, My wife having PAN card with a parental surname but now she is owing a PF account account with my surname. how can she apply for PF withdrawal..
if she submit her PAN, it will marked name difference.
Hi Arjun, This is a situation that is common for many employees. The best way would be to speak to your employer to rectify. Otherwise if you have activated your UAN, you can check if your KYC has been approved. If it has you will have no issue in withdrawing your PF. Another case is if you have Aadhar linked and the name is the same, you should be able to withdraw this.
I have applied for PF withdrawal after entering pan card in epfo portal. I have completed five years of services in present job. After online withdrawal i came to know my pan is not verified by my employer. Though i have made partial withdrawal for house construction. Will TDS be deducted? If yes, how much? How to get it refunded?
HI Kaushik,
First of all request your employer to verify the PAN. Secondly if you want to save on TDS please fill and submit form 15G. generally the TDS is 10% of the amount taken as advance.
i want with draw PF an amount of below 50000 rs, whether i need to submit form 15h form or can i withdraw amount from UMANG app? please let me know
HI Uma,
Form 15 G helps you to save on tax deducted at source in case you are withdrawing all the amount and not taking advance. You can place a withdrawal request from the Umang App.
Hi,
my service period is less than 2.6 year and my pf amount is 30K.
i am not done kyc in EPFO portal in this situation they can reduce my pf amount as per taxes .or not
Hi Devang, if you have not completed 5 years of service TDS will be deducted on withdrawal amount. For tax to not be deducted you can submit Form 15G, available online and on EPFO portal.
hii sir my amount is 30000 but less then 5yrs but pancard is not update. so my tds will deduct. plz guide me
Hi,
If you withdraw your PF balance anytime before 5 years, you will be liable for paying a TDS of 10% or 30%, depending upon PAN verification. In your case, since your PAN details are not verified, you will have to pay a TDS of 30%.