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EPF or Employee’s Provident Fund is taxable if withdrawn before you complete 5 years of service.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 my full PF after completing 5 years of service, in my UAN PAN is not verified. So taw would be deducted form PF ?
and whether i need to submit form 15G while submitting PF withdrawal ??
Hi Chirag,
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. As PF withdrawal isn’t taxable after 5 years of service, so from 15G is not needed for PF withdrawal.
Sir my employee and employer total contribution is 40000 and pension contribution 12000. Pan is not updated. Please tell me my case is in 50000 plus or below 50000. Can i withdraw full amount without tax deduction.
There is no tax on the withdrawal only if you have completed 5 years of a service in that particular firm.
I want to withdraw my full PF amount of 147000 and my service period was 8 years so is it necessary to update my PAN or i can withdraw my full amount without updating PAN detail in UAN portal.
My name on income tax department is saved as .
It is correct in PAN card and same is what is present in UAN portal. I am not able to add PAN as KYC document due to error “Name in UAN is not matching with name in income tax department”
Please advise
You might have to visit the PF office for this.
Hi sir , I have 38,000 including employee and employer share, and in Pension i have 17,000 . Now i want to go for full claim (form 19 and 10c) . Pan card is not seeded in my epf account. Is there any chances of TDS deductions. as per the EPF rules below 50,000 is not taxable. My case will fall into 50,000 plus or below 50,000. please give me clarity on this.
Hi Jagan, it is recommended to link your PAN with EPF account as TDS of approximately 34.60% will be deducted during the final PF withdrawal without a valid PAN number. However, if you have linked your PAN card with EPF account, the rate at which TDS will be deducted is 10%.
If your account is older than the threshold limit of 5 years, you can save from TDS at the time of withdrawing the amount.
Hi, my PF account is 5years old with the same company and my Aadhaar is also verified with PF.Although my PAN card is linked to PF but it is not verified.Do i need to submit form 15G to avoid TDS or is it okay to withdraw without PAN verification also?
Hi Krishna,since your PF is 5 years old, your TDS will not be deducted and you don’t have to submit form 15G. However, as per the new norms, you need to verify your PF account with PAN Card to withdraw the amount.