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EPF or Employee’s Provident Fund is taxable if withdrawn before you complete 5 years of service.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, I need urgent help, in my epf there are three sources through which I believe money got deposited, one is employee share other is pension contribution and employer share, if I club all these three amounts its around 91k and 11k was withdrawn last year as illness… my Sal annual was more than 2.5 L but PF amount is 91k roughly and service less than 5 years. Do I still need to submit form 15g and will I be taxed
If you do not want taxes on withdrawal, then you will have to submit 15G. Be aware that a withdrawal is different from an advance. a withdrawal is possible only after you leave a particular job.
Hi, I need urgent help, in my epf there are three sources through which I believe money got deposited, one is employee share other is pension contribution and employer share, if I club all these three amounts its around 91k and 11k was withdrawn last year as illness… my Sal annual was more than 2.5 L but PF amount is 91k roughly and service less than 5 years. Do I still need to submit form 15g and will I be taxed
Hi Hassan, the employee provident fund (EPF) balance is tax-free if the employee has completed continuous service with his or her employer for a period of five years or more. In your case, TDS will deducted on EPF balance if withdrawn before 5 years of continuous service. If you have had less than 5 years of service and plan to withdraw more than Rs 50,000, you need to submit Form 15G or Form15H. You can submit form 15G/15H on PF withdrawal and avoid TDS deduction on the PF withdrawal amount.
hi, my share is 18000,employer share is 19000,my pension is 40000 so what are the deductions that will be done,when i tried to apply for my withdrawal it said me since pan is not updated if the settlement crosses 50000 then 34.7% will be deducted as tax,but when i tried to apply for pension it never showed me any deductions.
how is the settlement calculated is it my share+employer share+pension or my share + employer share and pension seperately.
Pension does not invite tax, only employer+employee share does in the case of withdrawal (which is generally 10% TDS). In the case of advance there should not be a tax.
Hi
My service period is 30 months , my total of amount is 63000(including pension amount) . Last year 2019 I withdraw 36000 rupees. Now I want to withdraw pending amount, in this case 15 g from is required,
Hi,
Form 15 G is required if you want to save on tax deducted at source, which might be 10% in your case of the amount you withdraw
Can i withdraw my final pf settlement with out submitting pan and form15g and my service is less than 5years and amount also less than 50000
HI Ganesh, yes you can withdraw your PF settlement without submitting PAN. But you have to link your Aadhar for the withdrawal. If your service is less than 5 years you might have to pay TDS on the amount. When you receive your final amount in your bank account the TDS would be deducted.