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EPF or Employee’s Provident Fund is taxable if withdrawn before you complete 5 years of service.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 withdrawal PF which is less than 50,000. And I haven’t completed 5 years of service. Will TDS be deducted on my money?
Hi Mohd,
If you have not completed 5 years of continuous contribution towards the EPF and wants to make a withdrawal, the withdrawal can be tax exempted if you submit Form 15G or Form 15H along with your PAN card details ,but this applies if the total PF amount is more or equal to Rs. 50,000.
Hello sir,
My pan number is not updated in my pf account. I want to withdraw my PF. My service period was less than 5 years and my balance is also less than 50,000. Is my withdrawal taxable, if I apply for the withdrawal without updation of pan?
Hi Sunny,
TDS is not applicable if you withdraw more than or equal to Rs. 50, 000 with service less than 5 years, but this applies only if you submit your Permanent Account Number (PAN) along with form 15 G/15H. However, it is recommended that you should first get your PAN Updated and then withdraw the amount.
Hi Neil,
I recently applied for EPF withdrawal, however, my request got rejected and the EPFO department is asking me to submit my PAN Card with Form 15G for approval. However, I have read that Form 15G must be filled only by residents of India and I am currently overseas. What should I do? Should I still submit Form 15G for withdrawal in this situation?
Hi Saumya,
No you are not required to submit the form 15G as it applies to Indian Residents and not to the Non-Indian Residents.
Hi Sir/Madam,
I have worked for nearly 10 years across 3 firms (but not for more than 5 years in any firm). My employment terminated 4months back. My PF balance is well over 50,000. I have Aadhar linked to my account & was able to submit online PF claim. But my claim was rejected with following message:
FORM 15G/15H, PAN CARD NOT SUBMITTED BY MEMBER
I see that Form 15G doesn’t apply to me because my service is greater than 5years (pls let me know if its not the case). But, is it mandatory to submit PAN card? And by ‘submitting PAN card’ do they mean verifying it in KYC section of the portal? Once PAN is verified in KYC, can I go ahead & submit the claim?
Hi Pavan,
You will have to submit your PAN in the KYC section and get it verified. Once it is verified, only then will you be able to process the claim online.
Hello Sir/Madam,
I am trying to withdrawal my PF and Pension amount full. Since I am jobless for more than 3 months. I have claimed for Form-10C & Form-19 by providing form 15G as well not to cut TDS, though I am not under Tax payroll. But both of my claim got rejected by saying “Claim Rejected FORM 15G,PAN CARD NOT SUBMITTED BY MEMBER. 34 PERCENT OF TAX IS GETTING DEDUCTED.” but my all KYC documents are updated in EPF portal. I worked in the company for 2 years. Can anyone help to resolve this issue.
Hi Soumik,
You can login to the Member e-sewa portal and check if your PAN card is linked with UAN or not under the KYC section. If you cannot see your PAN details, it means your PAN was not linked with UAN.
Thus you will have to update your PAN there and once it is approved by the employer, you can withdraw the amount in full without any TDS being deducted.