EPFO (indicative picture).
– Photo: Social Media
If you withdraw money from Employees Provident Fund (EPF) then it is a matter of relief. If you withdraw money from EPF without PAN card, now it will be taxed at 20 per cent, which used to be 30 per cent earlier. Finance Minister Nirmala Sitharaman announced this in the budget on Wednesday. This reduction in tax deducted on withdrawal from Employees’ Provident Fund is going to help those salaried individuals whose PAN is not updated in EPFO (Employees’ Provident Fund Organisation) records.
TDS is deducted on EPF withdrawal within five years of account opening
As per the current income tax laws, TDS is deducted on EPF withdrawals within five years of account opening. If PAN is available with EPFO, TDS is deducted at the rate of 10 per cent if the withdrawal amount exceeds Rs 50,000. However, you can claim its refund.
As per Budget 2023, many low paid employees do not have PAN and thus TDS is being deducted at the maximum rate in their cases under section 192A. In case of failure to furnish PAN, 10 per cent less tax will be deducted. An EPF account holder can submit Form 15H or Form 15G to the EPFO to ensure that no TDS is deducted on withdrawals from the EPF account. Form 15G is for people below 60 years of age and Form 15H is for people above 60 years of age.
TDS will be applicable if withdrawn before five years
TDS is not deducted if the withdrawal is less than Rs 50,000 from EPF before the completion of 5 years. But if more than Rs 50 thousand is withdrawn before the completion of the period of 5 years, then TDS will be deducted. Even if one changes jobs and continues with old EPF, TDS is not deducted on withdrawals, provided the condition of 5 years and Rs 50,000 is met.
IT portal will be made to get unclaimed shares and dividends
You can take back unclaimed shares and unpaid dividends. A special portal will be created for this. CA KP Singh says that this step taken by the government will benefit the people and the claim process will be easy. The final dividend is declared at the end of the financial year.
Common ITR form will come soon
An announcement has also been made in the budget for those who file income tax returns. Common ITR form will be available soon. Apart from this, the government is also planning to enhance the IT grievance redressal mechanism. Most ITRs are processed within 24 hours. But this work will be done more quickly with the new form.